Consumer losses worsen after All Travel collapse

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Consumer losses are piling up after the collapse of Helloworld affiliate All Travel.

Customers with All Travel are estimated to have lost more than AUD $530,000, which is a 32 per cent increase on the AUD $400,000 in consumer claims originally reported.

TravelManagers chairman Barry Mayo said that if the collapse had happened a week later that there would have been confusion over how the consumers would have been compensated as the upcoming ATAS scheme does not have any mandatory consumer protection.

It is envisaged that the affected customers will be compensated with credit card charge-backs to the tune of AUD $100,000 or 19 per cent of all the lost money.

“With only 19 per cent of All Travel’s client losses being attributed to credit card payments I think it clearlyshows the reality that client payments using credit cards are decreasing, not increasing as AFTA has claimed, this is due to more and more suppliers charging for merchant fees,”  Mr Mayo said.

The Australian Federation of Travel Agents has previously said that customers paying travel agents by credit card will be protected because of the ability to make charge-backs.

However, Mr Mayo said that the number of customers paying by credit card is dropping due to merchant fees so that less customers will have charge-back protection.

Mr Mayo reiterated that the only solution was to run ATAS in conjunction with the Travel Compensation Fund to the end of 2014 in order to address the aforementioned concerns.

The existing Travel Compensation Fund regime, which protects consumers against travel intermediary collapse, is due to be wound up today and replaced with the voluntary ATAS scheme.

Source = ETB News: Travel Managers
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