p5 news June5 3/6/09 22:21 Page 5
ttglive.com
news
Van Gogh boss
C
O
awaits verdict
STO
VER Agents face credit
R
Y
card chargebacks
TRAVELSCOPE Holidays’ former finance director,
Mark Horwood, was due to hear whether or not
Lee Hayhurst.
be impossible to get credit clearance, or cards
he will face an investigation yesterday. AGENTS whose customers made XL Leisure Group will demand massive deposits to clear funds in a
The Institute of Chartered Accountants of claims on their credit cards are facing a backlash sector that is now regarded as worse than porn.
England and Wales is looking at a complaint from the credit industry, it has been warned. “This, in essence, would be bonding by stealth
against the collapsed firm’s former director. Increasingly, angry merchant service providers with the credit card companies enforcing much
Horwood set up Van Gogh Cruise Line soon are said to be looking to recoup losses in the tougher terms than we would have ever imagined.”
after the collapse, which took on some of the lost travel industry by taking chargeback payments Chris Photi, White Hart Associates senior
holidays but which also went into administration out of agents’ accounts. partner, said the situation was “disastrous” and
after its ship, Van Gogh, was impounded. Credit card providers are allowed to withdraw stemmed from the introduction of the APC £1
Former Travelscope boss Richard Ford has funds from customers’ accounts without notice Atol levy that “decimated” the bonding market.
raised questions over Horwood’s conduct since under certain circumstances. He said travel firms were being viewed with
Travelscope’s collapse in December 2007 which TTG understands credit cards will justify this increasing caution by credit cards and he was
left 270 people out of work and 45,000 cancelled by saying transactions on sites that did not have being constantly contacted by profitable compa-
holidays. additional security, such as “Verified by Visa”, nies which had been asked for more security.
A spokeswoman for the institute said: “Our were unauthorised payments. Agents who took out or extended Atols before
disciplinary bylaws prohibit us from commenting One major online agency confirmed it had al- last September’s XL collapse – often after being
on any matter which may or may not be the ready had a number of chargebacks, although persuaded to by the CAA – took on customer
subject of consideration by our Professional these were refunded after it took legal advice. financial responsibility.
Conduct Department. However, with credit cards carrying an increas- However, it is thought many did not realise the
“Where such consideration results in ing burden for protecting customers, agents have implication of this until the CAA started to reject
disciplinary action being taken then a public been warned to expect a rash of chargebacks. claims from Atol agents.
announcement is made.” Steve Endacott, On Holiday Group chief execu- The XL collapse cost The Co-operative Travel
tive, said the industry £1.5 million and
had “naively” thought it
“Cards will now
Endacott believes the
Votes will be close,
could get away with pass- reaction by credit cards
ing the buck to credit
demand massive
was to blame for Free-
says Abta hopeful
cards to pick up the bill.
deposits to clear
dom Direct’s failure.
“How stupid are we? Abta head of legal
Recharges will be made
funds in a sector
Simon Bunce said the
DANIELE Broccoli (pictured), the agent hoping on many companies who
that is now
situation underlined
to win the first election for Abta chairman, is thought they had got the association’s de-
expecting the vote to be a close-run contest. away with it,” he said.
regarded as
mands for a simpler
Broccoli, owner of Britaly Travel, is up against “Either that or it will
worse than porn”
system.
Advantage chief executive John McEwan in the
election, which closes on Wednesday.
FREEDOM FALL-OUT.
“Normally you can get a feeling for this, but
because this has not been done before it’s hard
Suppliers may tighten payment terms
to tell,” he said.
Broccoli said he was surprised by the SUPPLIERS could start demanding payments are dynamic packaging. If Abta no longer protects
level of support he had received – passed on from Abta agents as soon as bookings that pipeline money, suppliers must take it from
including from a number of operators are made, in the wake of Freedom Direct’s failure. the agent immediately.”
as well as fellow agents. The large Following the collapse, Abta told suppliers they Abta head of legal Simon Bunce said Abta was
agent vote, which Broccoli has must adhere to agency law by honouring justified in insisting agency law is followed.
specifically appealed to in his bookings, including those for which payment “This is how commerce has worked for
campaign, could prove to be from agents was outstanding. hundreds of years. It’s not as though we’ve just
crucial in the election. With the CAA also looking to avoid payouts come up with this stuff,” he said.
Jamie Gardiner, of Acorn (TTG May 15), suppliers which fear their pipeline “You have some companies in the industry which
Adventures, said: “The big monies are no longer protected are expected to have been creative and looked for new ways to
companies, which domi- change their agency payment terms. do business, which is fantastic, but sometimes
nate Abta, are worried Steve Endacott, On Holiday Group chief execu- that rubs up against the usual rules of contract.”
they might lose control.” tive, said: “Everyone is keeping their heads down Bunce said Abta had previously referred a bed
and hoping someone else picks up the cheque. bank member to the OFT on this issue, after
■ Letters, p29 “Many agents are being cashflowed by which it changed its terms and conditions.
05.06.2009 05
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