Calif. TCRC chair: 'No fallout from downturn yet' The TCRC's fund is above $1.6 million, but it could take hits in the coming month if agents and suppliers shut down and leave consumers financially hurt. By Laura Del Rosso / October 22, 2001 Share 1 -- NORTHRIDGE, Calif. -- In a time when many travel agents are fearful not only for their own survival but of that of travel suppliers, how well prepared is California's Travel Consumer Restitution Corp. (TCRC) to cope with an onslaught of claims should financially shaky suppliers fail? The TCRC's fund is above $1.6 million, but it could take hits in the coming months if agents and suppliers shut down and leave consumers financially hurt, said Patricia Campbell, chairman of the TCRC board of directors and an agent with All About Travel in Northridge, Calif. Thus far, activity has been quiet, she said."We haven't seen any fallout from [the travel downturn] yet," she said. "I don't feel as though the fund is in any danger. When travel agencies fail, the losses are not great. Remember that we're only concerned with California consumers who are impacted by California companies."The fund normally is replenished at the beginning of each year, when California travel sellers, in the course of renewing their registration, pay an assessment determined by the board.This year, no assessment was necessary because the fund, which generates interest, was above the $1.6 million level required for the board to levy an assessment.The 5,200 California travel sellers who participate in the TCRC range from mom-and-pop agencies to some of the largest names in the industry, including Pleasant Holidays, Classic Custom Vacations and Brendan Tours.The TCRC has some protection against huge claims because consumers must first try every other possible remedy -- the U.S. Tour Operators Association's $1 million consumer protection fund, for example -- before applying to the TCRC for refunds, Campbell noted.The TCRC board keeps tabs on the fund during the year because if the fund level is below $900,000 on May 1 or on Oct. 15, an emergency assessment of travel sellers is required.The law limits the emergency assessments to twice a year, not to exceed $150 total per year, per travel seller.There is one concern, however, that Campbell does have regarding the program: the fewer travel agencies and operators in business in California, the fewer number of companies that participate in the TCRC and thus the potential would exist for higher assessments to bring the fund to its mandated levels.Those assessments could rise to a level that would be impossible for the program to continue, she said.If huge losses were to occur in the California travel industry and large numbers of companies failed -- requiring emergency assessments of a small number of firms -- the attorney general's office would shut down the program, Campbell said."In order for the fund to work, the industry has to be viable. If the fund were unable to cover losses with normal assessments, I believe the attorney general would step in and shut the program down. To do anything else would be penalizing businesses that manage to hang on."Meanwhile, the TCRC issued a statement alerting California travel sellers that disclaimers printed on agency material required by the law should be updated.Campbell said she is aware that invoice stock printed by suppliers of travel agency stationary was correct when the law went into effect, but was not updated when the law was modified in 1999.Invoices and disclaimers should state that claims must be submitted to the TCRC within six months after the scheduled completion date of travel. Previously, the law had allowed up to a year for claims to be filed.Sellers should supply their printing companies with the language that appears on page four of the Sample Disclosure Language material provided by the attorney general's office with registration renewals, the TCRC said.Calif. agency gets $80K from fundSANTA BARBARA, Calif. -- Your Travel Center, a Carlson Wagonlit Travel associate agency based here, recently received $80,000 from California's Travel Consumer Restitution Fund -- the first time a travel agency has benefitted from a program designed to refund consumers money lost from the failure of a travel supplier.The agency, which hired travel attorney Alexander Anolik to submit documentation to the board of the Travel Consumer Restitution Corp., was stung when its clients lost their payments to David Anderson Safaris, a Santa Barbara-based tour operator that closed in late 1999.In August, the five-member TCRC board of travel agents decided in favor of Your Travel Center, granting the agency $80,000 it lost when it paid ground operators in South Africa to proceed with the tour for 34 people, originally booked through David Anderson Safaris.Patricia Campbell, chairman of the TCRC board and an agent at All About Travel in Northridge, Calif., said it is the first time an agency has received restitution.The reason the agency was granted the money, she said, is because it collected waivers from members of the tour group, who agreed to sign over their rights to collect restitution to Your Travel Center."Many times travel agents pay money from their own pocket when they are dealing with good customers," she said. "It's a noble thing to do. Travel agents can go to the TCRC if the clients sign over their rights to collect to them."Anolik, the San Francisco attorney and ARTA legal counsel who has been a frequent critic of the California Seller of Travel law that ushered in the TCRC program, said that -- even though the program benefitted his client -- the TCRC's action still does not diminish his distaste for the premise behind the program, which he believes unfairly asks travel agents to pick up the tab when suppliers go under.Anolik said "it's only fair" that travel agents be allowed to collect restitution since they are the major contributors to the fund.Under the program, California-based travel agents are assessed each year to contribute to a $1.6 million restitution fund that is overseen by the TCRC board.California residents can file claims to collect refunds in the event that they have been hurt financially by a California-based travel supplier registered under the Seller of Travel program. The claims are decided by the TCRC board.Colin Weatherhead, president of Your Travel Center, said his agency "is very happy" with the results of the TCRC action.Weatherhead said he took a "big risk" in paying $80,000 to ground operators in South Africa after funds it paid to David Anderson Safaris were lost when the company failed."We could have gone to the customers and had them pay again and then explain to them about applying to the TCRC for refunds but we thought that would be too difficult and time consuming.This group is a big customer of ours and a well-known family in the area. We made the decision to pay the ground operator in Africa the full amount of money. Then, we had them all sign affidavits saying [the agency was] entitled to any monies received from the TCRC."Weatherhead said he believes the TCRC fund should be used "to protect the consumer and any travel agency that goes to bat for the consumer."Meanwhile, David Anderson, owner of the company which failed in 1999 is back in business with a new safari company based in Santa Barbara, David Anderson Safari Consultants.Anderson told Travel Weekly the 1999 failure was a result of a dispute with minority investors in his former company, which has resulted in litigation.His new company, he noted, does not take any money from consumers or travel agents. He is working exclusively with Away.com, a Washington-based online travel site that specializes in adventure travel."All the client money goes through Away.com," he said.