Consumer watchdog gets behind TCF

Consumer watchdog Choice has referred to the cancellation of Classic International Cruises’s Australian season as evidence that abandonment of the Travel Compensation Fund will leave Australians “high and dry”.

Head of campaigns Matt Levey urged Consumer Affairs ministers to reject the proposals in the Draft Travel Industry Transition Plan when they meet on December 7 to determine the course of action.

“Just yesterday, more than 5,000 passengers booked on cancelled Athena cruises were told to contact the Travel Compensation Fund with most believed to have paid 40% deposits,” Levey said.

“If the fund is abolished, Consumer Affairs Ministers need to explain where they will direct people next time a travel company fails, recognising that one-third of travel expenditure is still done through agents, often for very expensive holidays.”

In a submission on the draft plan, Choice argued proposed changes were likely to see travellers left “out of pocket”.

It identified the plan’s reliance on chargeback protections offered by some credit cards as inadequate because not everyone uses that method to pay.

The role of travel insurance in protecting consumers is also questionable because existing products do not cover the insolvency of travel agents, he continued, with no guarantee such products would materialise. Establishing an industry accreditation scheme would also do little to minimise risk without other measures in place.

Choice recommended that if the TCF is wound down, Ministers should provide funds for the creation of a national Travel Consumer Advocacy Centre to represent consumer interests.

Jayson Westbury, chief executive of the Australian Federation of Travel Agents, reiterated arguments that the burdens of the scheme far outweigh the benefits, as widely accepted in the transition plan.

It is unreasonable and unfair for travel agents to fund a scheme in order to repay consumers who did not even book with them, he said.

“The system is broken,” Westbury said. “We have great operators out there sucking it up and paying for the failure of competitors. It is simply not fair.”

They are also “over burdened” with legislation and costs that overseas-based online companies operating in Australia do not face, he said.