Mark Pestronk
Q: Recently, a new standard-form agreement for ARC's Travel Agent Service Fee (TASF) program became effective as soon as we did our first fee transaction on or after Jan. 21. Do any of the changes help travel agencies, or do they all help ARC at agencies' expense?
A: Although ARC has never released data about the volume of dollars or transactions going through the program, my observation is that the majority of agencies use TASF for all or almost all of their fee processing.
The new agreement is about one-third as long as the old one (2,100 words vs. 6,100). ARC eliminated excess legalese, putting it all in fairly plain English. This is an excellent achievement.
However, the shortened form contains several new and unusual clauses, none of which help agencies, as I see it. Here is what I found:
First, the agency agrees to "seek to maintain, at all times, ethical standards of business conduct in its dealings with its clients, the public and ARC." There is no definition of "ethical," and I have no idea why ARC included such an odd clause.
Second, under the old agreement, the parties agreed that disputes between ARC and the agency would be settled by arbitration before the Travel Agent Arbiter. Now you get such arbitration only "if both parties agree," which means that ARC does not ever have to agree to arbitrate. Further, arbitration must now be "at ARC's headquarters."
Third, ARC specifies that "when Agent uses TASF, it is issuing an ARC Traffic Document," and "Agent must hold ARC Traffic Documents in trust for ARC until issued to Agent's clients, or until submitted to ARC." This means that ARC will try to hold the agency's owner personally liable whenever ARC discovers any fraudulent conduct in connection with TASFs by anyone at the agency, including independent contractors.
Fourth, the agency must keep all credit card data "secure and confidential" and must comply with "Payment Card Industry Data Security Standards (PCI-DSS)." Since almost no one knows what those standards are, and since the credit card companies do not teach agencies about those standards, the chance of violations exists.
Fifth, the "Agent must provide notice to card holders that their personal data will be disclosed to ARC for purposes of processing a TASF." Previously, such disclosure was required under the ARC Agent Reporting Agreement only "if required by applicable data protection laws," and I don't believe that such laws exist in most states.
Although not new, the following clauses, which have always been in the TASF agreement, deserve attention:
- ARC can raise the fees to whatever it wants at anytime on 10 days' notice.
- ARC can change the agreement unilaterally at any time.
- ARC can terminate any agency's participation in the program for any reason (or no reason) on 14 days' notice.