Many were left devastated and out of pocket by failed travel company, SI Holidays, after their collapse last month.
In fact, fellow trade press site KarryOn reported the business left behind $5.5 million of debt owed to agents, staff, suppliers, hotels and financial services.
Agents alone are estimated to be owed a whopping $831,349.25.
One of the first warning signs that something was amiss, was the companies exclusion from the Australian Federation of Travel Agents (AFTA) Supplier Failure Benefit provided by the federation’s Chargeback Scheme.
To find out what agents can do to safeguard themselves against being out of pocket from a failed supplier, we chatted with AFTA’s head of Public Policy and Strategic Partnerships, Dean Long.
Long told us that travel has always been a high-risk business, and that’s why AFTA created its chargeback scheme.
“It’s designed specifically to protect the travel agent in the event of a supplier collapse or a wholesaler collapse,” said Long.
“The SI Holidays case is a really good example where a number of members who were already a part of the AFTA chargeback scheme and they were able to claim that loss.”
According to Long, the scheme works like this:
“A client goes into a travel agent and pays credit card for a booking. With that booking there could be multiple parts, there could be a land provider, airline, hotel and a transfer.”
“The agent then goes and pays all those suppliers, but let’s say the land supplier goes insolvent, and cant deliver the product that the client has paid for. The agent can invoke the chargeback on their credit card.”
“At the end of the day, the travel agent has done the right thing; they’ve paid the end supplier, but the end supplier hasnt delivered.”
“But it doesn’t get deducted from the end supplier’s account, it gets deducted from the agent’s account. So the agent’s actually at a loss. And that’s just not fair.”
As part of the scheme, AFTA also works to get agents money back via the liquidator to add to the chargeback pool of funds.
“Anything we make goes straight back to the pool of contributions, that’s the beauty of a not-for-profit.”
Here’s a handy infographic to explain how it works:
“If you’re ATAS accredited its free to join and there are no upfront fees associated,” Long said.
Members can apply as part of their annual renewal, which is coming up for most of AFTA members so get on it, people!
