Mark PestronkQ: In last week's column, you noted some of the ways in which the new ARC Agent Reporting Agreement (ARA), which goes into effect on July 1, is even more one-sided than it was before. Are there other, smaller changes worth knowing? Do any of them actually help agencies? 

A: Aside from the widely publicized, five-day shortening of the payment date and adoption of the Associate Branch rule, there are several other changes worth knowing. I even see a few that unequivocally help agencies.

First, under the new agreement, which you can find at (on the News page, click on "2013 ARA/IAH Sections"), your Management Qualifier (MQ) no longer needs a specific length or kind of experience. The MQ can be any full-time employee whom the agency designates as the person responsible for the operations of the agency, including any branches. The MQ can work at any location or even at home.

Second, the ARC Specialist (i.e., the person who has passed ARC's written test) can be any full-time employee working from anywhere. As before, the MQ and the ARC Specialist can be the same person.

Third, ARC states that two or more ARC appointments can be together in the same location, allowing larger agencies to have separate ARC numbers for corporate, leisure and meeting departments, for example. The catch is that this rule is not actually in the new agreement; it will just be ARC's "policy."

Fourth, ARC will allow agencies to keep their existing ARC numbers when they move offices across state lines; i.e., the old state numerical identifier will remain unchanged even though the location has moved to a different state. This streamlines the movement of branch offices for large agencies, but, again, you cannot actually find this rule in the agreement.

Fifth, the new agreement is much easier to read and understand, partly because it is 74% shorter than the old one, having gone from 36,000 words to 9,500. The catch is that most of the shortening was achieved simply by shifting major parts of the old agreement into the ARC Handbook. The shifted parts are under the "View IAH Sections" link on the ARA page.

For example, the weekly reporting and settlement rules, the bond or letter of credit requirements and the e-ticket security rules are now in the Handbook only. Although the agreement incorporates the Handbook, I have no doubt that subsequent changes to the Handbook will be less visible to the agency community than changes to the agreement itself.

Sixth, at ASTA's urging, the agreement now expressly states that ARC will not take money from the agency's account without permission. This outlaws the much-hated Payment Express program, although ARC had voluntarily discontinued it anyway.

Seventh, ARC eliminated the rule that if your agency changed ownership before ARC approval of the change, you and the new owner had to post personal guaranties until ARC approval. As far as I know, ARC was not enforcing this rule anyway.

Finally, if you have a location with no sales or other ARC transactions during a sales period, you do not have to file a sales report for the week, as "ARC will automatically submit a 'No Sales' Report on Agent's behalf." So if you want to keep your ARC number but have nothing more to do with ARC, there is now a way to do so.

Mark Pestronk is a Washington-based lawyer specializing in travel law. To submit a question for Legal Briefs, email him at [email protected].


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