Consumer and Business Services
National travel industry reforms
FAQs for travel agents
1. What are the changes being made to travel agents’ regulation?
On 7 December 2012, a majority of state and territory Ministers for Consumer Affairs approved a
Travel Industry Transition Plan setting out reforms to travel agents’ regulation and the Travel
Compensation Fund (TCF).
These reforms will take effect in four phases:
Phase 1: From 1 July 2013, travel agents will not be required to lodge Annual Financial
Returns to the TCF (not applicable to Northern Territory travel agents as they are not TCF
participants)
Phase 2: Repeal of travel agents’ legislation by 30 June 2014
Phase 3: Introduction of a voluntary industry accreditation scheme from 1 July 2014, with
registration commencing in April 2014
Phase 4: Closure of the TCF by mid to late-2015 and final payments of any consumer
claims by 30 June 2015.
Different arrangements may apply in Western Australia from 1 July 2014. WA agents are advised
to check with their local licensing authority if, or when, any changes to licensing requirements in
their state will take effect.
2. What is the background to these reforms?
The current regulatory framework for travel agents was introduced in 1986. Since then, the rapid
rise of new and online business models, coupled with technological advancements and a growth in
direct bookings, has gradually reduced the relevance and effectiveness of the existing system. The
changing market place has also disadvantaged local travel businesses, which must compete with
offshore providers operating outside the regulatory framework.
The transition plan recommends a regulatory approach which complements industry efforts to
promote confidence and quality, and maintains appropriate levels of consumer protection.
3. I’m a travel agent. How do these changes affect me?
From 1 July 2013, travel agents are not required to lodge Annual Financial Returns to the Travel
Compensation Fund (TCF). This change only relates to the TCF’s auditing requirements and does
not affect agents’ financial auditing obligations under any other legislation or industry accreditation,
which will continue unchanged.
Further, all other licensing, TCF participation and compliance requirements will continue to apply
until 1 July 2014 or unless you are advised differently.
The second major change is scheduled to occur on 1 July 2014, with the removal of the
requirement to hold a licence in order to operate as a travel agent. From this date, licensing
authorities will no longer require existing, authorised travel agents to renew their licences or accept
any new licence applications. The requirement to be a participant in the TCF will also cease from
this date.
Travel agents in Western Australia are advised to check with their local licensing authority if – or
when – any changes in their state will take effect.
At all times, regardless of location, travel agents must continue to comply with the Australian
Consumer Law when supplying travel or travel-related services to consumers.
4. How do these changes benefit me?
The Transition Plan recommended that a one-off grant funded out of Travel Compensation Fund
reserves be made to the Australian Federation of Travel Agents to assist with the development of a
new industry accreditation scheme. This ensured that a proportion of funds originally received from
agents is channelled back into the industry for participants’ benefit.
5. What is expected of me until the changes come into effect?
Travel agents will need to maintain their Travel Compensation Fund (TCF) membership and
licence until 30 June 2014, subject to any changes of which they are advised.
From 1 July 2014 travel agents will be able to trade without needing to be members of the TCF or
hold a licence. Travel agents in Western Australia may be subject to different arrangements and
are advised to check with their state licensing authority.
At all times, when supplying travel or travel-related services to consumers, agents are reminded
that they must comply with their obligations under the Australian Consumer Law (ACL). Agents are
strongly encouraged to seek independent legal advice about their obligations under the ACL and
other laws of general application, which will apply regardless of the changes to the TCF and
licensing.
Consumer protection regulators have prepared a series of guides on the various rights and
remedies in the ACL, which agents may find useful, particularly the guide tailored for the travel and
accommodation industry.
The Australian Competition and Consumer Commission has also developed a free online
education program to help small businesses learn about their rights and obligations under
the Competition and Consumer Act 2010, which includes the ACL.
6. I’m thinking of becoming a travel agent. When is a good time to start?
If you are considering trading as a travel agent before 1 July 2014, please seek independent legal
and commercial advice about the best time to enter the industry. Unless and until you are advised
otherwise, do not assume that you will receive a refund of any fees that you may have to pay
before existing regulation is phased out.
Please contact your local state or territory licensing authority for information about your licensing
obligations.
Contact the TCF if you have any queries about the TCF’s requirements.
7. What happens if any funds are left over when the Travel Compensation Fund
(TCF) closes?
The TCF Trust Deed requires any funds remaining after the TCF closes to be redistributed to all
Australian governments except the Northern Territory, which does not participate in the Fund.
No portion of the TCF funds will be redistributed to agents, however the Transition Plan approved a
range of other uses before the Fund closes. These are to:
• develop educational and informative material about the national travel agent reforms for
businesses and consumers
• fund the development of a voluntary industry accreditation scheme for travel agents
• fund consumer research and advocacy initiatives
• settle any final compensation claims and, if necessary, cover the cost of any legal action
against a travel agent relating to these claims.
8. How do these changes affect consumers?
From 1 July 2014, various accreditation schemes and other corporate arrangements will ensure
that consumers in all Australian states and territories continue to have access to reputable agents.
Between 1 July 2014 and 30 June 2015, consumers will continue to be able to make a claim under
the Travel Compensation Fund relating to the 2013/14 financial year.
9. What is accreditation?
Accreditation means that a business has been approved by another body or organisation as
providing services of a particular quality or type, amongst other things. The process of seeking
and maintaining accreditation varies between organisations, but it is usually obtained by meeting a
range of eligibility criteria and paying a fee.
A business may be required to meet these criteria each year in order to keep their accreditation.
In some instances, only an accredited agent can provide particular services, such as issuing tickets
or selling boutique travel products on behalf of a supplier. Otherwise, accreditation is a good way
for businesses to differentiate themselves from their competitors.
Travel agents who are accredited may advertise their accreditation by displaying a quality mark or
other symbol that indicates their expertise, competence and reliability.
10. What is the new ATAS accreditation scheme for Travel Intermediaries?
The peak industry body for travel agents, the Australian Federation of Travel Agents (AFTA), has
developed a new voluntary accreditation scheme known as the AFTA Travel Accreditation
Scheme, or ATAS, for travel intermediaries.
An intermediary includes a travel agent, travel management company, aggregator, distributor,
online travel agent, inbound tour operator, wholesaler and consolidator.
Applications for ATAS accreditation will be accepted by AFTA from April 2014, with the scheme
officially commencing on 1 July 2014. To become an ATAS-accredited agent, applicants must be
found to comply with a range of criteria. Accredited agents will be assigned an ATAS participant
number and be given access to the ATAS brand – a mark of quality and professionalism.
Travel agents with ATAS accreditation can choose to take out a range of optional insurance
products that protects both their business and their customers if an end supplier or travel agent
becomes insolvent and cannot deliver on the service paid by the customer.
For more information on ATAS go to www.afta.com.au or email [email protected].
11. Is accreditation mandatory?
It is not compulsory for travel agents to be accredited. However in some instances, only an
accredited agent can provide particular services, such as issuing tickets or selling boutique travel
products on behalf of a supplier.
In addition to ATAS accreditation, travel agents can be accredited by a number of other
organisations within their industry, such as the International Air Transport Association (IATA) or the
Cruise Lines International Association of Australasia (CLIA). In some instances, an agent may
also be approved under the National Tourism Accreditation Framework (NTAF). Such agents are
authorised to display a T-QUAL symbol.
Contact the relevant organisations for more information about these accreditation schemes.
12. What insurance is available to protect my business and customers?
Generally, travel insurance that consumers buy only covers the cost of cancelling or changing any
travel arrangements for unforeseen reasons, lost luggage or travel documents, legal bills and
overseas emergency medical expenses.
Most insurance policies do not offer protection when consumers’ travel arrangements fail to go
ahead as planned because the airline or other end supplier collapsed or became insolvent.
Agents have the option to take out three types of insolvency protection offered by International
Passenger Protection (IPP). In Australia, IPP is represented by local insurance broker, Gow-Gates.
IPP’s product range consists of:
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Scheduled Airline Failure Insurance (SAFI), which covers losses arising from the insolvency of
an airline
End Supplier Failure Insurance (ESFI), which covers losses arising from the insolvency of an
airline and other end suppliers
ATAS Participant Insolvency Insurance (APII), which covers the insolvency of the agent.
As well as protecting consumers, these insurance products can also protect agents from the cost
of any credit card charge backs obtained by the consumer.
For more information about these insurance products, and which one may be suitable for your
business, visit www.afta.com.au or contact Gow Gates directly on (02) 8267 9999.
13. What are my obligations under the Australian Consumer Law?
The ACL applies to all Australian businesses. It sets out the same obligations for travel agents no
matter where they operate in Australia.
Under the ACL, you must not:
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act unconscionably
mislead or deceive consumers
make false or misleading representations
fail to supply services for which you have accepted payment
include unfair terms in any standard form contract presented to the consumer.
You must provide accurate information to consumers, in particular:
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ensure that promotional material is not false or misleading
inform customers of any increase in costs or changes as soon as possible
quote accurate prices and ensure that surcharges are clear and not hidden
provide accurate information regarding passports, visas, customs and health requirements.
You must also guarantee that services are provided with due care and skill and be fit for their
purpose.
If you fail to comply with the ACL, you may face a fine of up to $1.1 million for a company and
$220,000 for an individual. A range of other penalties also apply.