Claims

TAANZ operates a Bonding Scheme to offer some protection to consumers should a TAANZ member collapse.

Information on any such collapse in the past six months and how to make a claim will be contained within this page. A set of Frequently Asked Questions is included below.

Travel Agency Collapse – Frequently Asked Questions

Q1: I understand a travel agency has gone out of business. Which companies are affected?

A: The following TAANZ members have ceased trading in the last six months:

7th July 2011 - Brunel Enterprises Limited trading as United Travel Rotorua, 1290 Tutanekai Street Rotorua.
18th July 2011 - World Travel 36 Limited t/as World Travel Centre, 733 Cameron Road Tauranga.

Q2: What problems will this collapse cause consumers?

A: When consumers pay a travel agent for air fares and other travel arrangements these funds are then passed on to the supplier of the travel, such as airlines, hotels and tour companies. In return, the consumer receives a ticket and other travel documentation. A problem can arise when a travel agency collapses after the consumer has made payment to the agent but the agent has not yet passed this payment on to the supplier.

Q3: I have booked travel arrangements directly through the affected office and have paid in full and received all my tickets – am I protected?

A: If you have paid the travel agent and have received your travel documentation (airline tickets, accommodation vouchers, etc.) then it is probable that your contracts with the suppliers of the services will be in place and enforceable by you. Airlines will invariably honour their tickets even when the agent which has received payment from you has not paid the airline. The airline ticket is the contract of carriage between the customer and the airline. The travel agent is the agent of the airline and the airline will have authorised the agent to issue you, the customer, with the ticket. In doing so the airline assumes responsibility for collecting payment from the agent. Payment to the agent by the customer is, in such circumstances, tantamount to paying the airline directly. The same legal principles will usually apply to other suppliers such as accommodation providers, but we would recommend that you check with the accommodation providers that they will honour their contract with you before you travel. Some accommodation providers have in the past failed to honour their contractual obligations when defaulting agents (which have been paid by the customer and have provided the customer with vouchers and receipts) have not paid them. Notwithstanding your legal rights this presents a practical problem which in many cases can only be resolved by the customer paying a second time and then, if the customer has the resources, issuing proceedings to recover the second payment from the accommodation provider.

Q4: I have booked travel arrangements directly through the affected office and have paid in part or in full but I have not received any tickets as yet – am I protected?

A: If the travel agent’s financial records are in order and the moneys received from you have been paid into the travel agent’s dedicated client services account (a trust account) then you should be able to recover that money from the receiver or liquidator of the travel agent if the sum in question is traceable. Usually however when a travel agent fails it will have done so because it has not maintained a separate client services account but has treated moneys received from clients as its own. It is more likely that there will be no funds in the travel agent’s bank account to enable it (or the liquidator) to repay you. If the travel agent has paid all or part of the moneys it received from you to the airline or to any other supplier then you would be able to claim that money or a credit for that money from the supplier who received it. Where however the travel agent has not paid the airline or the other supplier and the airline or other supplier has not issued the ticket or voucher then you will be exposed. Your only chance of recovery will be as an unsecured creditor in the liquidation or by making a claim on the TAANZ Bonding Fund.

(See the answers to question 7, question 8, question 9 and 10 for further information in this regard.)

Q5: I have booked travel arrangements directly through the affected office but haven’t made any payments at all – will my booking still be valid?

A: Not having paid the agent you will not have suffered any direct financial loss.

Q6: I have been told that some or all of the monies I have paid for travel arrangements have not been passed on to the suppliers and I am out of pocket – how can I recover this?

A: Travel insurance generally will not cover against this type of loss. TAANZ operates a Bonding Scheme that may offer you some protection. If you have made payment to a TAANZ member travel agent you may be eligible to claim the whole or part of your loss from the TAANZ Bonding Fund.

Q7: What types of transactions are likely to be covered?

A: The TAANZ Bonding Scheme provides limited protection to retail customers of TAANZ members when the TAANZ member is in default of its obligations. In essence this means that the TAANZ member must have failed to account in an appropriate way for the moneys that it received from you. Those moneys were received on the basis that it would apply them for the purchase of airline tickets and related services in accordance with your instructions.

If it has paid those moneys to the appropriate principals then it will have discharged its obligations. If it has not done so and if the funds are not held in a client service trust account by the TAANZ member then you would have a claim on the TAANZ Bonding Fund if you have not received from the agent the appropriate tickets or vouchers.

Only those transactions where the TAANZ member was acting in its capacity as a retail travel agent will be covered.

The purchase of goods of a retail nature or non travel related products are not covered by the TAANZ Bonding Scheme.

Q8: How does the TAANZ Bonding Scheme work?

A: The Airline Fund can be claimed on by airlines where you have paid the agent for air tickets and received them but the agent has not passed your payment on to the airline. Most but not all airlines are a party to this fund. When you check with the airline, either directly or through another TAANZ bonded travel agent, to see if your booking is being held and your ticket is valid, you may find that this fund has been used to secure payment for your air ticket.

The Consumer Fund can be claimed on by consumers who have not received the tickets or the services for which they have paid the TAANZ member to arrange. The fund is limited to a maximum exposure of $250,000 for all claims concerning the activities of any one TAANZ member.

Full details of the Scheme can be accessed here.

Q9: I think that I am eligible to make a claim on the Bonding Fund – what do I do next?

A: You should write to TAANZ within six months of the collapse of the TAANZ member at the address here enclosing copies of all your receipts and tickets. TAANZ has a Claims Assessor who will verify the documentation and may contact you for more information.

Due to the scale and nature of a collapse any reimbursement may be delayed until all claims have been received at the end of the six month cut-off period.