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Call for protection benchmark amid ‘referral agent’ row

The boss of The Travel Network Group has called for an industry standard to ensure all agents meet financial and professional standards – even if they are not handling clients’ money.

Group chief executive Gary Lewis spoke out as Trailfinders chairman Mike Gooley slammed the Atol scheme as “impotent” and endorsed the trust fund travel agency business model as the best way to protect clients’ money.

Trust funds are one of three trading methods agents can use to comply with the Package Travel Regulations, alongside bonding and insurance models.

Lewis’s comments follow criticism of suppliers that work with ‘unbonded’ or ‘referral’ agents who are not members of consortia or Abta and do not face the same costs as full-service agents.

He said: “There has to be an industry standard on financial protection and the way agents behave, even if they are not handling clients’ money.

“Clients won’t ask [referral] agents questions because they get an Atol Certificate from the supplier. But they may not have been given the right advice.”

Trailfinders recently joined the Travel Trust Association, part of The Travel Network Group, which operates a trust fund model offering financial protection to suppliers and clients.

In a strongly worded statement, Gooley said: “The travel industry has been more fraught with constant financial failure than any other enterprise and this has resulted in not just loss of money, but untold misery.

“The solution is so blindingly simple: the mandatory operation of a trust fund is to ring-fence pipeline funds and prevent their use for any other purpose than that intended.”

Travel protection group Protected Trust Services (PTS), which also operates a trust model and has had 19 agencies join this year, said use of the term ‘unbonded’ had sparked widespread confusion.

Head of marketing communications Jacqui Cleaver said the term was “misleading” because bonding is not required to operate a financially protected business. She added that PTS had been forced to reassure its agents that bonding was not needed and explain the trust model to suppliers.

MoreComment: Atol scheme is ‘impotent’

Trailfinders quits Abta to join Travel Trust Association

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