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TICO warns against charging clients for refund-related fees or penalties

TICO warns against charging clients for refund-related fees or penalties

Wednesday, April 8, 2020

TORONTO — Frustration with refund demands from clients is at an all-time high but TICO says registrants must adhere to existing laws and regulations when dealing with refund requests, amid reports that some registrants are charging clients for refund-related fees or penalties.

A bulletin sent out by TICO today says registrants cannot charge a fee or penalty to process a refund when it was not disclosed at the time of booking nor stated on the customer’s invoice.

“It has come to TICO’s attention that some customers are being charged and/or invoiced for fees and/or penalties to process refunds due to the COVID-19 pandemic.

“Although we appreciate the frustration that many of you feel as a result of the strain the travel industry is currently under, it is imperative that you continue to adhere to the laws and regulations that govern your business.”

In the past couple of weeks both the Canadian Transportation Agency (CTA) and the Ontario government have come out with new directives in favour of vouchers / future travel credits, aimed at mitigating the impact of the hundreds of thousands of cancellations brought on by the coronavirus pandemic.

Travel agents know that some clients want refunds, but they also understand that an entire industry will be on the brink of collapse if suppliers and retailers are on the hook for refunds on this scale.

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There are also issues when it comes to registrants’ obligation to issue vouchers or similar documents in files with multiple travel services bundled together via a supplier or suppliers.

TICO says it continues to receive customer complaints regarding some registrants who are not reimbursing customers, or at a minimum issuing vouchers representing value equal to travel services purchased and not provided, for future travel services for packaged tours and holidays that were cancelled by the registrant, indefinitely postponed and/or no longer available to the customer as suppliers declared a failure to provide services (eg.. airlines, cruise lines, hotels, etc.) related to COVID-19. This may include situations where it has been suggested to the customer that they have the option of cancelling when in fact the services are no longer available.

“We understand some customers may have purchased insurance which may provide full or partial reimbursement, but unless fully covered, the registrant still has the obligation to ensure the customer has been made whole,” says TICO.

TICO notes that in cases where registrants have only sold another registrant’s package, and not acquired any rights to those components for resale, the registrant that sells to the customer is not subject to this provision.

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More details are at TICO’s Registrar Bulletin on Vouchers and Similar Documents .

TICO’s latest update also deals with reimbursements required for customers whose trips were cut short.

“The issuance of vouchers also applies if the customer was at the destination and their travel services (e.g. vacation) abruptly ended. Those registrants who packaged services are required to provide a voucher for the value of travel services not provided.

 

TICO’s examples include:

  • Customer booked a 2-week air and accommodation package and only received one week, having to be flown home early
  • Customer received roundtrip air but only one-week accommodations
  • Customer is entitled to future voucher for the value representing the one- week accommodations not received

 

TICO adds: “TICO understands that these are challenging and uncertain times for businesses; however, it is important to note that as the Regulator, TICO is legally obligated to uphold the legislation.”

TICO says its Compliance Team can be reached at 1-888-451-TICO (8426) or email: tico@tico.ca.

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