afta travel accreditation scheme (atas) consultation
TRANSCRIPT
September 2015
AFTA TRAVEL ACCREDITATION SCHEME (ATAS) CONSULTATION
Submission to the First Year Review of the
ATAS Charter and Code of Conduct
ABOUT US
Set up by consumers for consumers, CHOICE is the consumer advocate that provides
Australians with information and advice, free from commercial bias. By mobilising
Australia’s largest and loudest consumer movement, CHOICE fights to hold industry
and government accountable and achieve real change on the issues that matter most.
To find out more about CHOICE’s campaign work visit www.choice.com.au/campaigns
and to support our campaigns, sign up at www.choice.com.au/campaignsupporter
CONTENTS
INTRODUCTION ....................................................................................................................... 3
Summary of recommendations ............................................................................................ 4
Industry deregulation and its implications for consumers ........................................................... 6
Compensation in the post-TCF market ................................................................................ 6
Consumer priorities for ATAS .............................................................................................. 8
ATAS’s position in the market .................................................................................................... 8
Travel agent insolvency ............................................................................................................. 9
Credit card chargebacks .................................................................................................... 12
Dispute resolution .................................................................................................................... 13
Governance arrangements ................................................................................................ 15
Improving accessibility through transparency .................................................................... 16
ATAS complaint handling processes ................................................................................. 18
Conclusion ............................................................................................................................... 19
CHOICE | ATAS/AFTA Review 3
INTRODUCTION
CHOICE appreciates the opportunity to provide comment on the First Year Review of the ATAS
Charter and Code of Conduct (the Charter, the Code). CHOICE considers that the Code and
Charter should require that travel agents operate in a professional manner and be held to higher
standards that they would otherwise be required by law, enhancing consumer protection.
The replacement of the former licencing requirements and the Travel Compensation Fund with
industry self-regulation and the ATAS scheme has reduced consumer protections. Recently, a
number of travel agents have ceased trading and consumers have found themselves out of
pocket. The estimated collective loss of over a $1 million demonstrates that stronger protections
are required.
Many of these travel agents were not AFTA members but this is little comfort to the consumers
who had purchased a holiday and lost their money. Under the previous scheme, loss of this kind
was covered by the Travel Compensation Fund.
This review provides a chance to strengthen and enhance the scheme. The recommendations
cover ways to improve the transparency and functioning of the scheme to allow greater
assessment of its performance and to provide better overall results for consumers.
CHOICE | ATAS/AFTA Review 4
Summary of recommendations
# Recommendation
1 That ATAS release annual public reports detailing the number of successful and
unsuccessful ATAS application/renewals, along with aggregated data on the main
reasons for rejected applications.
2 That ATAS release an annual report detailing the known ATAS accredited agents
that have become insolvent over the last 12 months and whether or not
consumers affected were adequately protected and compensated. This report
should also critically reflect on the decision to grant any agents ATAS
accreditation and if necessary propose changes to the accreditation process, the
ATAS charter or the ATAS code to prevent unsuitable applicants being granted
accreditation in the future. The report should be made public.
3 That ATAS survey accredited members and collect data on the measures they are
taking to protect clients against their insolvency. This data should be aggregated
and released publically so that governments, CHOICE and other stakeholders can
assess the extent to which consumers are protected. This survey should be
conducted every 12 months.
4 That ATAS continue to work with consumer organisations and governments to
increase awareness of credit card chargebacks but also continue to address other
means to improve consumer protection and access to compensation.
5 That AFTA categorises the enquiries, complaints, breaches and outcomes of
investigations. That AFTA make these statistics and findings publicly available.
Information released should include:
o Top complaints received and most complained about brands (if applicable)
o The top breaches that occurred
o The average time taken to finalise complaints
o The top ineligible complaints received
o Case studies of any major or high events that occurred in the year
7 That ATAS survey complainants, travellers who have made an enquiry to AFTA or
ATAS but were ineligible to complain via the scheme, as well as the scheme
participants to gauge the satisfaction of travellers and scheme participants. The
survey should be developed in conjunction with consumer representative
organisations and the findings of the survey be made public.
8 The ATAS Charter and Code of Conduct be reformatted to be made more user
CHOICE | ATAS/AFTA Review 5
friendly. This includes removing ‘commercial in confidence’ from publicly available
copies of the documents, and making a clearly designed dispute scheme
flowchart available to the public..
9 That AFTA staff be excluded as members of the ACCMC, and that the AFTA CEO
be replaced with an AFTA-sponsored industry representative.
10 That a separate secretariat be created for ACCMC so that reviews are produced
by someone other than the Compliance Manager.
11 That section 2.5(g) of the ATAS charter be repealed and replaced with the
following:
“The applicant must be committed to the efficient and effective resolution
of complaints and disputes.
The applicant will prominently publicise the availability and accessibility of
both the internal and the external processes for resolving disputes through
its points of contact with its clients where it controls that point of contact
including: (a) branch offices; (b) internet sites; and (c) telephone-based
services.
The applicant will also provide clients with written information about: (a) its
internal process for dealing with a dispute at the time the dispute arises;
and (b) the external process, at the same time as the client is told about
the final outcome of the internal process, if the complaint is not wholly
satisfied.
A model ATAS customer dispute resolution and complaints handling
procedure is provided by way of reference at Attachment F.”
12 That the timeframe for complaints to be lodged be extended to two years after the
incident (noting that ATAS can only review complaints that have occurred since
the 1st July 2014 when the scheme was introduced).
CHOICE | ATAS/AFTA Review 6
Industry deregulation and its implications for
consumers
Following the decision of governments to deregulate Australia’s travel intermediary industry, it is
crucial that consumers are left, at the very least, no worse off. Therefore it is important to
acknowledge the different ways the industry’s deregulation has impacted consumer protection.
The reforms commencing on 1 July 2014 had two primary effects: to wind down the Travel
Compensation Fund (TCF) and to abolish mandatory licencing for travel agents.
The TCF provided financial compensation for consumers in the event that their travel agent
became insolvent. Followings its repeal, consumers have limited avenues available to recoup
funds already paid for their travel in the event of an agent’s collapse. Mandatory licencing
attempted to mitigate agent insolvency and other forms of consumer detriment by seeking to
ensure that only fit and proper persons operated travel agencies. Without licencing
requirements the industry is at risk of attracting people with little industry knowledge or business
skills, increasing the likelihood of travel agent collapse or fraud.
Accordingly the Travel Industry Transition Plan identified several different approaches to
ensuring that consumer protection was maintained following deregulation. The ATAS is one of
these measures. However, as the Plan stated:
“An accreditation scheme that does not feature a compensatory function would be of
little use in the event of agent insolvency. The merit of an accreditation scheme
would lie in its ability to serve as a barrier to entry to the intermediary industry and
as an alternative to industry association membership or industry accreditation (e.g.
IATA) for travel agents who still wish to signal their quality to consumers.1”
ATAS currently has no compensation function and thus primarily serves to address the void
created by abolishing licencing – that is to provide consumers with a reference point for
choosing a reliable agent. The issue of consumer compensation has had to be addressed in
other ways. The question for this review is whether or not they are adequate.
Compensation in the post-TCF market
1 Travel Industry Transition Plan (2012), p. 20
CHOICE | ATAS/AFTA Review 7
In its submission to the Consumer Protection in the Travel and Travel Related Services Market
consultation in 2011 AFTA highlighted the following solutions or mitigations for consumers in the
event of agent insolvency:
1. Using the Australian Consumer Law to recoup costs.
2. Using reputable agents, which could be assisted through the ATAS and other industry-led arrangements (for example IATA and credit card merchant accreditation).
3. Insuring against insolvency and paying by credit card in order to gain access to chargeback.2
The use of the ACL for compensation has a major flaw in that an insolvent business can’t pay
compensation to consumers even if liable to do so.3 A consumer seeking to use ACL to recoup
costs will find themselves one of many creditors in the event of an agent’s collapse. The use of
ACL is not a genuine solution to the lack of protection caused by the winding down of the TCF.
Indeed, as the Plan noted, because of the deficiencies of the ACL in this respect, the ATAS
would become more important:
“From the perspective of obtaining compensation, the ACL is self-enforcing in that
the burden of seeking a refund or damages is shifted on to consumers. Unless relief
can be obtained through a low-cost tribunal or alternative dispute resolution or
conciliation, legal action can potentially be time-consuming and costly. The absence
of an automatic compensatory mechanism highlights the importance of choosing
carefully when transacting with a particular agent. Consideration of ancillary
regulatory mechanisms such as IATA accreditation, AFTA membership, brand
awareness and market presence will become a necessary step for consumers who
buy travel services.”4
Both credit card chargeback and insurance were also discussed as potential solutions. On
insurance the Plan acknowledged that “no travel insurance product currently protects
consumers against losses from travel agent insolvency.5” This should not be surprising as while
the TCF was in place there was little incentive for insurance companies to offer this coverage.
The question is whether or not this has continued in the deregulated environment. Credit card
2 Consumer protection in the travel and travel-related services market (2011), p.24 3 Consumers affected by an agent's default will need to demonstrate an entitlement to compensation under the ACL (for example, non-supply) or for a breach of
contract, through recourse to alternative dispute resolution or a mainstream court or tribunal. Success would be contingent on the agent having sufficient
resources (including any business insurance and instruments such as a bank guarantee) to pay the consumer's claim after any other secured creditors had been
compensated, and on whether the consumer could fund any necessary legal action. 4 Travel Industry Transition Plan (2012), p. 50 5 Ibid., p.49
CHOICE | ATAS/AFTA Review 8
chargebacks were considered by the Plan as a good alternative option for consumers, and
promoting awareness of chargebacks was a key objective of the Pack some peace of mind
campaign. However, the Plan did acknowledge CHOICE’s concerns about relying on high cost
debt payment as a proxy for consumer protection.
Consumer priorities for ATAS
The priority of ATAS should be to ensure that consumers are adequately protected in the new
regulatory environment. This applies to the potential for consumer detriment created by both the
repeal of the TCF and mandatory licencing. As such CHOICE has used the following consumer
priorities to assess ATAS:
1. ATAS must have high levels of consumer awareness so that consumers can make
informed decisions.
2. ATAS accredited agents must provide good quality and reliable service and must be fit
and proper business people.
3. ATAS’s dispute resolution system must be transparent, accessible and objective and
agents must have sufficient incentive to follow decisions.
4. Consumers must have access to protection against agent insolvency, while still be able
to choose a travel insurance policy in a competitive market that best suits their needs.
5. Consumers must be aware of credit card chargebacks in order to make an informed
decision, however they should not need to rely on chargebacks for protection.
ATAS’s position in the market
CHOICE’s travel advocacy project has conducted a survey of travel consumers to identify key
areas of consumer detriment, trends in consumer behaviour and the performance and
awareness of consumer protections – including that of ATAS.6
The research shows that almost half of Australian travellers (49%) used a travel agent to book
at least some part of their travel plans over the past 12 months. This was fairly consistent for all
generations excluding the older ‘Pre-Boomer’ generation, which was more likely to use a travel
agent (at 58%). The main criteria for consumers in choosing an agent are:
6 The survey was conducted amongst n= 1,517 Australians, aged between 18-75 years. All participants had taken a domestic flight for a holiday in the past 12
months and were also required to have taken at least one international flight in the last two years. The fieldwork for the research took place from 22 June to 6
July, 2015. In order to ensure that the sample is representative of the Australian population, the data for this research has been weighted by age, gender and
state according to ABS Census Data, 2011. The fieldwork agency used for this phase is GMI Lightspeed Research. The survey made up Phase Two of the
research funded through CHOICE’s travel project, and will hereafter be referred to as ‘Phase Two’ research.
CHOICE | ATAS/AFTA Review 9
Experience and professionalism of the staff (96% said very/somewhat important)
Well-known brand/trusted travel agent brand (92% said very/somewhat important)
Previous experience with the travel agent (90% said very/somewhat important)
Location of the travel agents office/s (75% said very/somewhat important)
Travel agent’s website (72% said very/somewhat important)
Accreditation with ATAS (71% said very/somewhat important)
Referral by friends or family (71% said very/somewhat important)
Type/range of travel insurance policies available (70% said very/somewhat important)
I liked the look of their shop (50% said very/somewhat important)7
While ATAS accreditation is not the top reason why a consumer would choose one agent over
another, it is a notable factor with 71% of people who have used an agent saying it’s said very
or somewhat important in their decision. Awareness of ATAS amongst all the respondents of
the survey was 19%, while AFTA had an awareness rating of 29%. Awareness of ATAS may
appear low, but after only 12 month in operation 19% is respectable.
Observations
Awareness of ATAS is relatively healthy at this time
Accreditation influences a consumer’s decision of agent, but not as much as other
factors
Travel agent insolvency
According to the Plan some of the potential solutions to consumer protection issues arising from
the industry’s deregulation may be addressed by the market. Namely with the TCF gone it may
be expected that insurance products would become available to offer coverage against agent
insolvency. A number of insurance products have been made available to travel agents to help
them secure their clients’ funds against their own insolvency. This includes agent insolvency
insurance and other insurance products such as travel agent client trust account fidelity
insurance.
Certain agents have been advertising their own guarantees:
7 Statistics only for consumers who have used an agent in the past 12 months.
CHOICE | ATAS/AFTA Review 10
Mobile Travel Agents (MTA) has launched ‘Zero Flight Risk’ which provides a guarantee
against the failure of intermediaries and is advertised as going “much further than the
previous protection afforded under the former Travel Compensation Fund.”8 Although it
does not explicitly state that it covers agents, this claim certainly implies that it does.
The Magellan Travel Group has launched its own guarantee against intermediary
insolvencies, including agent insolvencies, called ‘Book Smart’9.
Travel Counsellors offer a ‘Total Financial Protection’10 with the claim “every single
penny of your booking is protected - no ifs, no buts, no maybes.” This includes
protection against travel agent insolvency.11
Travel Managers uses clients’ trust accounts to help protect client funds, and has taken
out additional insurance for intermediaries.12
Helloworld, one of the market leaders in Australia, offers a guarantee that was put into
action when Travel Rockhampton ceased trading earlier this year.13
Overall however ATAS accredited agents are not required to take out insurance against their
insolvency, or to take other steps to protect their clients. It is unclear to what extent ATAS
accredited agents are choosing to offer this protection so the extent of any consumer detriment
due to lack of protection is difficult to gauge.
Travel Rockhampton, mentioned above, was an ATAS accredited agent when it became
insolvent. Another agency which ceased trading this year, CTS Travel, was also ATAS
accredited however did not offer protection for its clients’ funds. Its collapse has left at least 70
creditors owed $340,00014. While some consumers have had success with credit card
chargebacks and insurance many have not, according to a Facebook group set up for those
8 http://www.mtatravel.com.au/latest-news/holidays/zero-flight-risk-dont-let-your-money-go-away-without-you 9 See http://www.platinumtravelcorp.com.au/ckeditor/ckfinder/userfiles/files/1%20BookSmart_Magellan-Consumer-DL-v1.pdf for an example of the literature
provided by Magellan agents. 10 http://recruitment.travelcounsellors.com/au/our-world/blogs/travel-counsellors-offer-customers-total-financial-protection/ 11 Their material does not explicitly say that agents are included, but calls to the company confirm that they do. 12 http://www.travelmanagers.com.au/peace-mind/ 13 The guarantee states that “In the event a helloworld member ceases to trade or otherwise fails financially, helloworld will provide either the travel products and
services or the appropriate refund, (to the extent any customer bookings made through that member are not refunded or otherwise dealt with by your credit card
or travel insurance provider).”
14 http://www.heraldsun.com.au/leader/west/consumer-affairs-to-investigate-altona-meadows-travel-agency-cts-travel/story-fngnvmj7-1227368502845
CHOICE | ATAS/AFTA Review 11
affected.15 According to reports16, the CTS Travel director’s husband, David Stoodley, was the
director of another travel agent which was placed in voluntary liquidation in June 2014.
Since 1 July 2014 CHOICE is aware of three unaccredited agents which have gone into
liquidation; Getaway Escapes and Aus Flights in March 201517 and Australian Specialty Tours
in August 2014.18
While some agents have not been taking measures to protect their clients’ funds, few
consumer-facing products have been made available. CHOICE is aware of only one consumer
travel insurance product which covers agent insolvency.19 However there appears to be some
consumer confusion over whether or not they are covered. According to Phase Two research,
56% of travellers who purchased travel insurance either believed or assumed that their
insurance would cover them for bankruptcy and insolvency of the travel agent. Considering only
one policy appears to offer such coverage, it is likely that consumers are mistaken in believing
that they are covered for insolvency. Only 12% of survey participants were certain that their
insurance didn’t include this protection, while 32% could not remember.
Observations
Consumers are exposed to financial loss as not all agents, including ATAS agents, offer
adequate protection for clients against their default. The extent of this risk to consumers
is not well known due to lack of data.
Products are being made available for agents to provide protection for consumers.
However the market for consumer-facing products has been slower to react.
With two ATAS agents becoming insolvent in 2015 so far, there are concerns that the
scheme may not be successfully ensuring that accredited agents embody the desired
level of expertise, professionalism and business acumen.
Several high-profile travel agent brands have taken steps to provide protection for
consumers, and are using it as a point of difference in order to attract potential clients.
Recommendations
15 https://www.facebook.com/groups/970366446316363 16 http://www.heraldsun.com.au/leader/west/consumer-affairs-to-investigate-altona-meadows-travel-agency-cts-travel/story-fngnvmj7-1227368502845 17 https://www.qld.gov.au/law/laws-regulated-industries-and-accountability/queensland-laws-and-regulations/fair-trading-services-programs-and-resources/fair-
trading-latest-news/media-statements/warning-for-customers-of-getaway-escapes-and-ausflights/ 18 https://insolvencynotices.asic.gov.au/browsesearch-notices/notice-details/Australian-Specialty-Tours-Pty-Ltd-113519234/19f5cdd9-9f0d-4229-b4e4-
b61e7a67fe0e 19 ‘Express Insurance’ by QBE
CHOICE | ATAS/AFTA Review 12
That ATAS release annual public reports detailing the number of successful and
unsuccessful ATAS applications or renewals, along with aggregated data on the main
reasons for rejected applications.
That ATAS release an annual report detailing the known ATAS accredited agents that
have become insolvent over the last 12 months and whether or not consumers affected
were adequately protected and compensated. This report should also critically reflect on
the decision to grant the agents ATAS accreditation and if necessary propose changes
to the accreditation process, the ATAS charter or the ATAS code to prevent unsuitable
applicants being granted accreditation in the future. The report should be made public.
That ATAS survey accredited members and collect data on the measures they are
taking to protect clients against their insolvency. This data should be aggregated and
released publically so that governments, CHOICE and other stakeholders can assess
the extent to which consumers are protected. This survey should be conducted every 12
months.
Credit card chargebacks
CHOICE would like to reiterate that it does not believe that chargeback should be relied upon as
a de facto consumer protection. Firstly, paying by credit card can be expensive for consumers
who will be charged interest on their debt (which can often be set at extremely high levels) and
who may also have to pay a surcharge. Secondly, chargebacks can be confusing. Not all banks
and credit card providers follow the same procedure for claiming chargeback. Thirdly, some
claim procedures have time periods for making claims that are inappropriate for travel.
Commonwealth Bank for examples requires that “to request a chargeback, tell us you want to
chargeback the transaction within 30 days of the date of the statement which shows the
transaction and provide us with any information we ask for to support your request”20. However
for travel purchases it is not uncommon for consumers to book service many months in
advance.
Fourthly, credit cards are a common payment method but many consumers choose to pay via
other methods. Phase Two research from project shows that of the consumers who used a
travel agent in the past 12 months, 59% paid with a credit card. This leaves 41% of consumers
unprotected. Lastly, as shown in Phase One of the research, consumers with disabilities and
culturally and linguistically diverse consumers are less likely to have access to, or pay with, a
credit card.
20 https://www.commbank.com.au/personal/accounts/managing-your-accounts/dispute-a-transaction.html
CHOICE | ATAS/AFTA Review 13
While CHOICE has sought to increase the awareness of the availability of chargebacks so that
consumers can make fully informed opinions, consumers may nevertheless wish to avoid using
credit cards for other reasons. It is important that those consumers are not forfeiting consumer
protections to do so. This means other measures must be in place.
Observations
Credit card chargeback remains an incomplete solution to agent insolvency and
consumer protection.
Recommendation
That ATAS continue to work with consumer organisations and governments to increase
awareness of credit card chargebacks but also continue to address other means to
improve consumer protection and access to compensation.
Dispute resolution
According to Phase Two research, 15% of all Australian travellers reported experiencing a
problem with a travel agent in the previous 12 months (this is down slightly from 18% from
Phase One). This amounts to 27% of consumers who actually used a travel agent. Of these
consumers, 13% described the problem as ‘major’ while 14% described it as ‘minor’. Of those
who contacted the agent to resolve the issue, 64% said they were satisfied with the response.
Of consumers who contacted AFTA with a problem, 89% said they were satisfied, while 89%
saying they were satisfied with the response they received from ATAS21. These figures for AFTA
and ATAS should be approached with caution given the relatively small sample size.
ATAS’s dispute resolution process has the potential to address consumer detriment with travel
agents, improve overall standards in the industry and operate as a major benefit for consumers
in choosing an ATAS accredited agent. However it is important that the scheme is accessible
and objective in order for this to occur. Increased transparency would help identify deficiencies
within the process, as well any emerging issues in the industry more broadly. The 2015
AFTA/ATAS annual report detailed only basic data on the complaints scheme, providing an
overview of the number of complaints and breaches that have occurred. 22 More detailed
21 n=33 people contacted AFTA with a complaint and n=33 contacted ATAS with a complaint. 22 See page17 of AFTA’s 2015 annual report http://www.afta.com.au/file/uploads/298/annual-report-2015_final.pdf
CHOICE | ATAS/AFTA Review 14
information categorising the breaches, enquiries and complaints that ATAS receives will help
identify systemic issues.
For example, the Airline Customer Advocate releases an annual report that details:23
The most common complaints received (for example ‘refund request’ or ‘flight delays
and cancellations’)
The average time taken to finalise complaints
The top complaints for each participating airline, and their overall level of complaints
A report on any major events that occurred in the year
The results of a customer survey asking complainants how satisfied they were with the
service of the Advocate
The Telecommunications Ombudsman’s annual report also breaks data down by:24
The most common complaints (for example, ‘customer service’ or ‘coverage’)
The services the complaints related to (mobile, landline or internet)
The average time taken to finalise complaints
The top complaints for the larger companies
Complaints by region
Analysis of emerging trends and case studies of major issues for the years, and there
outcomes
The results of a customer survey asking complainants how satisfied they were with the
service of the ombudsman
ATAS would benefit from similar levels of detail in its reports on complaints.
Observations
Without a greater level of information it is difficult to fully assess the ATAS dispute
resolution scheme.
Greater transparency will also allow stakeholders to identify emerging issues in the
industry. This includes more information on the top ineligible complaints being made by
consumers.
23 See http://www.airlinecustomeradvocate.com.au/_lib/Docs/AnnualReport/Annual_Report_2014.pdf for more information. 24 See https://www.tio.com.au/__data/assets/pdf_file/0005/162662/TIO-2014-Annual-Report-WEB.pdf for more information.
CHOICE | ATAS/AFTA Review 15
Recommendations
That AFTA categorises the enquiries, complaints, breaches and outcomes of
investigations. That AFTA makes these statistics and findings publicly available.
Statistics should include:
o Top complaints received and most complained about brands (if applicable)
o The top breaches that occurred
o The average time taken to finalise complaints
o The top ineligible complaints received
o Case studies of any major or high events that occurred in the year
That ATAS surveys complainants, travellers who have made an enquiry to AFTA or
ATAS but were ineligible to complain via the scheme, and scheme participants to gauge
satisfaction with the scheme. The survey should be developed in conjunction with
consumer representative organisations and the findings of the survey should be made
public.
The ATAS Charter and Code of Conduct should be reformatted to be made more user
friendly. This includes removing ‘commercial in confidence’ from publicly available
copies of the documents, and making a clearly designed dispute scheme flowchart
available to the public.
Governance arrangements
The ACCMC is “an independent review body specifically established under ATAS to review and
determine customer complaints, allegations of non-compliance with the ATAS Charter and
Code”.25 At present the Chief Executive of AFTA is a member of the ACCMC. The CEO of
AFTA also has “overall responsibility for ATAS’ operation and ensuring that ATAS is aligned
with the AFTA Board’s strategic direction.” This results in the same person who has operational
responsibility for ATAS being a member of the monitoring committee that is supposed to provide
oversight of ATAS.
The ACCC’s Guidelines for developing effective voluntary industry codes of conduct states that
the independent review body should be recruited from outside the industry and hold no
25 Section 1.4(d) of the ATAS Charter (page4)
CHOICE | ATAS/AFTA Review 16
preconceived ideas about the industry.26 The monitoring committee must be free from either
real or perceived conflicts of interest to ensure that it is effective and that the community can
have trust in its independence.
Currently material is provided to the committee that could prejudice the outcome of their
decisions. Once a complaint is escalated to the ACCMC, the ACCMC is provided with material
that is written by the Compliance Manager. As the Compliance Manager has originally made a
finding, the ACCMC is essentially reviewing the Compliance Manager’s decision. As the
material made for the review is from the same person who made the original decision, creating
a conflict that could prejudice the manner in which the material is presented to the ACCMC for
review. For a fair determination and review of the original decision the material to the ACCMC
should be produced by someone other than the Compliance Manager.
Observations
Having the AFTA CEO as a member of the ACCMC creates a conflict of interest
The role of the Compliance Manager in preparing materials for the ACCMC can create
bias
Recommendations
That AFTA staff be excluded as members of the ACCMC, and that the AFTA CEO be
replaced with an AFTA-sponsored industry representative.
That a separate secretariat be created for ACCMC so that reviews are produced by
someone other than the Compliance Manager.
Improving accessibility through transparency
The Code stipulates that participants have consumer complaints handling procedures which
comply with the Australian Standard on Complaints Handling – Customer Satisfaction,
Guidelines for Complaints Handling in organisations (AS ISO 10002-2006) (the standard). One
of the Standard’s guiding principles is visibility. It states that “Information about how and where
to complain should be well publicised to customers, personnel and other interested parties.” For
agents to be compliant with the Standard, information on where and how to complain needs to
go beyond providing minimal information in the terms and conditions.
26 https://www.accc.gov.au/system/files/Guidelines%20for%20developing%20effective%20voluntary%20industry%20codes%20of%20conduct.pdf
CHOICE | ATAS/AFTA Review 17
The Code of Banking Practice 2013 does this effectively.27 The banking code requires that
participants publicise the availability and accessibility of both their internal and external
processes for resolving disputes in their branches, internet sites and telephone-based banking
services. It also ensures that consumers are informed of the external dispute resolution options
at the same time as they are told of the final outcome on an internal complaint.
By contrast the ATAS charter does not specify how consumers will be informed about the
dispute resolution process, only that is must adhere to the Standard:
“The applicant must provide evidence of its customer dispute resolution and
complaints handling policy (complaint and dispute resolution policy). This policy
must meet the Australian Standard on Complaints Handling – Customer
Satisfaction, Guidelines for Complaints Handling in organisations (AS ISO 10002-
2006) (Australian Standard).”28
If consumers are not aware that a dispute resolution process exists, they cannot access it. Once
a dispute does arise, the accredited agent does not have an incentive to make the consumer
aware of the scheme. Promotion of complaints handling options should occur as the consumer
is engaging the agent’s services.
Observation
CHOICE does not believe that the ATAS charter currently provides enough guidance to
members of how they are to inform consumers of the dispute scheme.
Recommendation:
That section 2.5(g) of the ATAS charter be repealed and replaced with the following:
“The applicant must be committed to the efficient and effective resolution of complaints
and disputes.
The applicant will prominently publicise the availability and accessibility of both the
internal and the external processes for resolving disputes through its points of contact
27 See section 39 (page 35) Availability of information about dispute resolution processes in the Code of Banking Practice 2013
http://www.bankers.asn.au/ArticleDocuments/172/ABA_CODE_MANDATE_FINAL_MID.PDF.aspx 28 See section 2.5(g) (page 9).
CHOICE | ATAS/AFTA Review 18
with its clients where it controls that point of contact including: (a) branch offices; (b)
internet sites; and (c) telephone-based services.
The applicant will also provide clients with written information about: (a) its internal
process for dealing with a dispute at the time the dispute arises; and (b) the external
process, at the same time as the client is told about the final outcome of the internal
process, if the complaint is not wholly satisfied.
A model ATAS customer dispute resolution and complaints handling procedure is
provided by way of reference at Attachment F.”
ATAS complaint handling processes
Currently complaints have to be lodged with ATAS within six months from when the original
incident occurred. There may be instances in which a complainant may not be able lodge their
complaint within the six month window. Complaints being lodged with ATAS occur at stage two
of the complaints process – which means they come after the complainant and the member fail
to come to an agreement (stage one). Stage one itself could conceivably take a longer period of
time, and it is reasonable to expect that there may be a gap between the failure occurring the
complaint being made – especially when travel is involved. During phase one the agent may
need to contact its intermediaries to receive advice, further information or refunds – all of which
can take time. Six months does not appear to be an adequate timeframe.
Other external dispute resolution schemes such as the Telecommunications Industry
Ombudsman allow complaints to be lodged within two years from when the incident occurred
and this can be extended up to six years in some circumstances.29 Consumers should be able
to be lodge their complaint up to two years after the incident occurred in line with other external
dispute resolution schemes, noting that ATAS can only review complaints that have occurred
since the 1st July 2014 when the scheme was introduced. The extended timeframe provides
ample time for consumers to lodge a complaint, while also being short enough for travel agents
to find any relevant documentation to assist in any inquiry or investigation.
29 See the TIO’s Complaints we handle page, https://www.tio.com.au/consumers/types-of-complaints-we-handle
CHOICE | ATAS/AFTA Review 19
Observation
The length of time that complaints have to escalate their complaint from level one to
level two is insufficient and is much shorter than other comparable schemes.
Recommendations:
That the timeframe for complaints to be lodged be extended to two years after the
incident (noting that ATAS can only review complaints that have occurred since the 1st
July 2014 when the scheme was introduced).
Conclusion
While still early in the life of the ATAS scheme, CHOICE has identified several areas for
improvement. Primarily the recommendations included in this submission relate to improving
transparency within the scheme so that ongoing assessments of its success are better
informed. Several recommendations also relate to improving governance arrangements and
processes so that the dispute resolution scheme is more accessible to consumers. Finally,
CHOICE would like to reiterate that ATAS was created to in part address issues of consumer
protection following industry deregulation, and that this purpose should remain at the forefront of
assessments and reviews of the scheme.