ASTA on Tuesday blasted a recent USA Today article alleging travel agencies operate "Ponzi-style schemes" to pay bookings.

The article states many agencies use one traveler's deposit to pay for a previous traveler's tickets and accommodations, a practice that has come under scrutiny during the coronavirus pandemic because with a lack of new bookings, some travelers have been left in the lurch. It discussed specifically, which appears to be an OTA that has closed its call centers, as well as two educational tour operators, Nawas and EF Tours.

"To suggest that this is the business practice of all travel agencies is categorically false," ASTA said in response to the article.

The travel companies referenced in the article were not ASTA members, the Society said. ASTA members must abide by the Society's 12-point code of ethics, "which prohibits business practices like the ones described in this article." Those that violate the code of ethics are expelled from ASTA, though the Society said the number of consumer complaints that end in expulsion of a member is "extremely low."

Agencies are also beholden to travel consumer protection laws in many states, Federal Trade Commission rules against unfair and deceptive practices and DOT consumer protection rules surrounding airline ticket refunds.

"As with any industry, a few bad apples are not reflective of the whole batch, and the actions taken by the agencies cited in the piece are anything but representative," ASTA said. "Indeed, in the wake of the first wave of travel chaos cause by the pandemic, often we found travel advisors going above and beyond for their clients."

The article, ASTA said, continues to "make sweeping statements" about agencies holding onto deposits for lengths of time before remitting them to suppliers, which "by no means is the standard of business practice for travel agencies."

Indeed, the Society said, agencies in many states are held to a standard in which they must put clients' interests before their own. If they don't, they can be sued.

"A travel advisor who does not pass the payment to their vendors in adequate time isn't doing their business any favor," ASTA said. "But again, this is hardly the way of business for all travel agencies-- as this article suggests."


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