Attorney challenges Calif. travel seller law The California law requires that travel sellers deposit 100% payments received in a trust account -- and not withdraw funds except to pay vendors -- until travel is completed. By Laura Del Rosso / April 11, 2001 Share 1 -- LOS ANGELES -- A travel attorney here is suggesting travel lawyers and trade associations create a model state law for regulating travel sellers to replace a patchwork of measures with "ill-defined and poorly conceived provisions." The attorney, J. Thomas Cairns, represents travel agencies and is a critic of California's Seller of Travel Law, adopted in 1995 with support from the state's retail travel industry.In a law article, Cairns unleashed a barrage of criticism against California for warning out-of-state travel firms with Web sites that they must register and comply with the state law if they do business on line with California residents.He said the move creates confusion and imposes a "substantial burden on the travel industry which, almost by definition, involves doing business in multiple jurisdictions."Cairns said model laws have been drafted by the National Conference of Commissioners on Uniform State Laws and the American Bar Association -- and voluntarily adopted by all 50 states with success.He distributed his article, "U.S. Sellers of Travel Laws: Model Codes or Regulatory Morass?" at the e-Commerce for Travel conference in Los Angeles.The article was first published in 1999 in the International Travel Law Journal. In the article, Cairns outlined several flaws in the California law.For example, it places the burden of processing registration and administering the program on the attorney general's office, bypassing the state's Department of Consumer Affairs, which regulates other trades and professions.This is a "serious mistake," Cairns said, because the attorney general's office is a law enforcement agency with "neither the experience nor the administrative resources necessary" to regulate a profession.In addition, the law exempts those who sell only ground transportation, airlines and cruise lines, all of which have caused harm to consumers with their failures, he said.Cairns also said the state's restitution fund is an ineffective and "unwieldy apparatus" that should be replaced by a simple bonding regime."It is also terribly inefficient to set up a whole claims administration system simply for a single industry in order to administer a very small number of claims," he said.The California law requires that travel sellers deposit 100% payments received in a trust account -- and not withdraw funds except to pay vendors -- until travel is completed.A travel seller is permitted to post a bond in lieu of a trust account, but the law places restrictions on that bond that make it difficult for an agency to comply, he said.Cairns said a dishonest seller has no qualms about operating outside of the trust account.The attorney general's "audits of the accounts are expensive, infrequent and most likely to occur only after a problem arises and it is already too late."