AGENCY DEBIT MEMO (ADM)
PURPOSE
IATA Resolution 850m describes the nature and purpose
of the ADM. Per § 1.1:
“The ADM serves to notify an Agent that unless there is
some justification to the contrary, the Agent owes the
issuing BSP Airline the amount shown on the ADM, for
the reasons indicated…”
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AGENCY DEBIT MEMO (ADM)
LIMITATIONS
Resolution 850m, § 1.2. describes the circumstances in
which ADM are to be used:
“1.2. ADMs are a legitimate accounting tool for use by
all BSP Airlines to collect amounts or make adjustments
to Agent transactions in respect of the issuance and use
of Traffic Documents issued by or at the request of the
Agent.”
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CONTRACTUAL POSITION
 IATA Accredited Agent executes an Agreement in the form
of Resolution 824 (reproduced in the Travel Agent’s
Handbook)
 upon appointment, per the governing Passenger Sales
Agency Rules, the Agreement becomes a bilateral contract
between the Agent and the appointing airline
 the contract is a sales agency agreement, covering
transactions effected by the Agent on behalf of the airline
 it follows that an ADM raised by a BSP Airline must stem
from an action by the Agent, taken under the above
contract, on behalf of that BSP Airline
 except where Agent and airline have agreed, beforehand, to
settle other transactions via the ADM. Also local
representation of Agent´s may agree on alternative uses of 3
ADMs.
SCOPE OF ADM
 an ADM results from a transaction initiated by an Agent
 other charges may be billed by ADM, provided there is
prior bilateral agreement with the Agent so debited, or with
the local representation of Agents.
 each Agent is entitled to a minimum of 14 days to review an
ADM before it is processed through BSP (Res 850m 4.6).
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ADM PRACTICE - ORIGINS
 the first IATA BSP ( 1971) included the ADM procedure
 its aim was to adjust transactions reported by the Agent
through the BSP
 right to dispute an ADM with the BSP Airline has always
existed
 purpose of the ADM dispute procedure is to ensure that
travel agents continue to maintain their pre-BSP, one-onone, relationships with the airlines
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TYPICAL ADMs
Typical examples of reasons for ADMs, used as legitimate
accounting tools include:
 to adjust an incorrect fare calculation by an Agent
 to recall retained commission which is not in fact payable
 to capture a transaction that was not reported by the
Agent at the time, through BSP
 for pre-agreed charges payable by Agent (e.g. rental of
automated ticketing equipment)
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ADM DISPUTE RULES - PRINCIPLES
 dispute procedure is provided in Resolution 832,
§ 1.7.10 and in Resolution 818g, Attachment ‘A’
§ 1.7.8
 an ADM can be disputed for cause
 reasonable notice (i.e. at least 14 days) of each
ADM must be given
 when ADM dispute is lodged, BSP Airline must
take timely action
 a duly disputed ADM is taken out of the BSP
Billing process
 each ADM must give an airline contact point in
adequate detail
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DISPUTED ADMs
(1)
ADMs that have been met and disputed:
 for charges not imputable to the Agent (e.g. excess baggage)
 for repatriation costs, when passenger was refused entry at
destination
 ADM issued out of time
 to cover multiple and unrelated sales transactions, instead of
for a specific transaction
 for a fare adjustment stemming from a revalidation to the
ticket which was made by the BSP Airline itself
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DISPUTED ADMs
(2)
 dispute action is ignored and ADM is processed through the
BSP by the airline
 for ‘administration fees’ or other charges levied by the BSP
Airline, which are arbitrary or disproportionate to cost
and/or for which prior notice has not been given to the Agent
 for another Agent’s sales transaction
 for another Airline’s ticket
 for the passenger’s transgression outside Agent’s control
 without adequate supporting documentation or explanation
 the ‘corrections’ shown in the ADM are themselves erroneous
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GETTING TO GRIPS WITH ADMs (1)
 ADM usage is increasing - with heightened scope for friction
 this is driven partly by enhanced technology and partly by more
rigorous airline cost control measures and partly by sometimes
disfunctional or time-expired data held in GDS computers
 industry consultative groups have sought and are seeking to
overcome the problems
 Agents and their associations are becoming more sensitive to
issues relating to loose ADM usage
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GETTING TO GRIPS WITH ADMs
(2)
 initially inadequate in several respects, Resolution 850m
has been progressively amended and improved by the
Passenger Agency Conference
 both sides of the industry must become familiar with
and follow new Resolution 850m
 Some travel agents do not do not systematically and
promptly monitor all incoming ADMs
 BSPlink potential is not always fully exploited by either
the issuer or the recipient of an ADM
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EFFECTIVE ADM DEMURRAL (1)
 monitor incoming ADMs as they arrive – professionals are
vigilant
 does the ADM meet the Resolution 850m tests? Be watchful!
 is the ADM in conformity with the BSP Airline’s published
ADM policy? Check the policy.
 is the ADM for a legitimate charge? Be objective – in
practice, most ADMs are justified
 is the revised calculation on the ADM itself correct?
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EFFECTIVE ADM DEMURRAL (2)
 if you disagree with an ADM, inform the Airline contact, in
writing, with copy to the BSP manager, giving your reasons
and seeking corrective action
 if the disagreement is not promptly resolved and the BSP
Airline maintains the ADM for processing, you can either
accept the impending debit or you can formally dispute it,
before it is debited (Resolution 850m gives the deadlines)
 a duly disputed ADM which remains unpaid will not
normally give rise to collective IATA disciplinary action
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QUERYING AN ADM
• each ADM must now include contact details of a
person or department of the ADM issuing airline
• in the first instance, contact that person/department
• if the Airline either rejects your initial protest and
upholds the debit action, and you nevertheless wish to
persevere, then ADM dispute action is outlined in
Resolution 832 – §1.7.10 and Resolution 818g,
Attachment ‘A’, §1.7.8
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INITIATING ADM DISPUTE
PROCEDURE
– notify the Airline in writing of the dispute action without delay, with
copy to the BSP Manager
– set out the grounds for the dispute, in adequate detail
– ask to meet a responsible representative of the airline to discuss the
disputed item
– some airlines outsource ADM preparation, so ensure you are in fact
dealing with a n airline contact
– if the dispute remains unresolved, you may suggest to the airline in
writing (copy to BSP Manager) that the matter be referred jointly to the
Travel Agency Commissioner for a solution (per Resolution 850m, §4.10)
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CONCLUSIONS
 ADMs are the by-product of modern audit technology,
they are on the increase and are here to stay
 From the incomplete data available it appears that actual
ADM dispute rates are low and that relatively few BSP
Airlines are involved in them
 loose discipline by some Agents is also an issue
 industry as a whole stands to benefit by the clearer,
simpler and more balanced ADM procedure, now in place
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