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
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
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
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
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
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 fund
SANTA 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
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
"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
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
Weatherhead said he believes the TCRC fund should be used "to
protect the consumer and any travel agency that goes to bat for the
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
"All the client money goes through Away.com," he said.