Travel Counsellors chairman David Speakman has warned the industry that it faces a public backlash if travel agents fail to safeguard customers’ money in Australia’s new-look regulatory landscape.
The outspoken home-working chief said agents who are “gold-plated” and protect clients’ money will be “besmirched” should an agent who does not, go bankrupt.
Speakman also attacked the global industry’s attitude to customer money, arguing it plays fast and loose with their cash.
The comments came as the Australian Federation of Travel Agents (AFTA) continues to develop its new voluntary accreditation scheme, which comes into effect next July.
Under the scheme, agents will be offered insurance policies being drawn up by UK-based International Passenger Protection (IPP).
The policies, which are optional and not a requirement to gain accreditation, will provide broad financial protection for consumers, and agents, in the event of travel agent or supplier failure.
Speakman, whose company operates a trust to protect client monies, said being an AFTA accredited agent could create the false impression that consumers’ money will be automatically protected.
“The perception will be that everyone is covered for everything. But the reality is that I could take out all the insurance available, and others do not,” he said. “If that is the case, if a consumer books through one of these guys who they perceive to be covered but isn’t [and collapses], it besmirches the ones who are gold-plated.
“It’ll be on the front pages and it will taint the whole industry.”
Trust for the entire travel agent community could be damaged, he said.
Speakman last year reported AFTA’s British equivalent, ABTA, to the UK Office of Fair Trading, accusing it of failing to crack down on members’ claims that they offered full financial protection when that was not strictly the case.
While not suggesting the scenario would be repeated in Australia, Speakman said being an AFTA-accredited agent could mislead consumers into believing their money is fully protected.
He added that Travel Counsellors would offer full protection for consumers in Australia, a plan the network confirmed today.
Speakman insisted financial protection is critical because it is the only industry that collects consumers’ money so far in advance.
He accused the industry of believing it is “entitled” to demand money sometimes months’ before departure, with some companies using that cash to fund other areas of their business.
“It’s the same in the UK and Australia, the industry collects money early, it doesn’t give the customer any interest and then has the audacity to want to charge them a fee just in case they lose that money,” Speakman said. “Money is being collected eight, 10 weeks, sometimes three or four months in advance and they are spending that money and taking risks probably where they shouldn’t because it’s easy money.
“The industry actually believes there is a certain entitlement in collecting money so far in advance because that’s how it has always worked. But it’s wrong.”
