As travel demand increases, travel advisors — while eager for booking opportunities — must evaluate if they are protected against some of the most common legal matters affecting advisors today. From protecting yourself from credit card chargebacks to updating your terms and conditions, these are the legal items to add to your agency’s to-do list.
1. Your Customers and Fraud
With increased business transacted through the internet, the potential for fraud grows. Fielding a call from an unfamiliar person who is looking to book five business class seats to a far-off location should raise concerns in your mind. Due diligence and customer verification is important to avoid fraudulent transactions.
Also, we have seen an uptick in fraud relating to wire and Automated Clearing House transactions. For example, an agency emailed a customer instructions for making a final payment for a Galapagos Islands journey via wire.
Unfortunately, the email was intercepted, and the customer was provided false information for the wire. The client was out $17,000, and the agency was held responsible as it had no firewall system in place. Advisors should also monitor agency accounts to make sure no monies are fraudulently debited from those accounts.
2. The Terms of Your Independent Contractor Agreement
Independent contractor agreements run the gamut from simple to overly complicated. Be mindful of clauses relating to termination, restrictive covenants, and duties and obligations when parting ways. Several states do not allow for enforcement of non-compete agreements, so you should understand the law that applies to your state.
3. Claims Against You
The best way to protect yourself from claims made by a customer is to have an enforceable booking agreement (or terms and conditions). Customers should be informed of planning charges, cancellation penalties assessed by you or your agency, the importance of purchasing travel protection plans and a waiver/release. Take the time to update your documents relating to the new world of travel created by the COVID-19 pandemic.
4. Intellectual Property Rights
More travel agencies are investing in creating a unique brand identity. While intellectual property law is extremely complicated, a trademark is a word, name or symbol adopted and used by a company to identify and distinguish its goods or services from the products and services of others.
Trademarks are symbols of the identity, goodwill and reputation of the source of the service provided. The first step is to determine if the name you have chosen is available. Online searching is the first part of this process.
Jeffrey Ment
Credit: 2022 Jeffrey MentIf you do register your trademark, you must use it (think “use it or lose it”). If you later find another company violating your hard-earned trademark, you can then enforce it and seek damages ranging from cease-and-desist orders to financial recovery for proven damages.
5. Credit Card Chargebacks
While we have hopefully seen the end of the surge in credit card chargebacks, it is always important to have an actual signed authorization (or electronically signed agreement) for any credit card charge.
Keeping your customer’s credit card on file might be convenient, but never use it without authorization. Many host agency agreements and supplier terms will hold you responsible for chargebacks.
6. Seller of Travel Regulations
The four states that have Seller of Travel regulations are California, Hawaii, Florida and Washington state. You (or your host agency) should be registered if you sell travel to residents of those states. The requirements vary from state to state and can be confusing. However, a travel law firm can help you sort through the legalese and figure out if you need to register.
7. Responsibilities Between You and Your Customer
These days, it is important that your customers are the ones responsible for ensuring that they can travel as planned. Make it clear that the customer needs to stay on top of entry/exit requirements and policies/mandates in place regarding vaccination status and masking rules. These all change so rapidly that you want to shield yourself from having to monitor conditions throughout the world.
8. Suppliers/Partners
As travel advisors, you can be held responsible for giving negligent advice (just like a financial advisor). Therefore, spend the time to research the partners and suppliers that you work with. Stay abreast of industry news. Book with reputable companies. Stay away from companies that are making the news for the wrong reasons. Document bookings when customers want to use a supplier that you do not recommend.
9. Future Travel Credits
While advisors do not create the terms and policies for future travel credits (FTC), you are left explaining it all to your customers. Unfortunately, there are no laws that regulate FTCs, so suppliers can create the rules as they go. Try and negotiate more favorable terms for your customers, but explain to them — in your terms and conditions — that you are not responsible for FTC terms.
10. Errors and Omissions Policies
It is vital to have errors and omissions (E&O) coverage. However, you should read through the policy exclusions, so you have a better understanding of what is not covered.
For instance — and quite applicable in a pandemic — claims for refunds or disagreements over cancellation terms are not covered by your E&O policy. Neither are breach of contract claims, claims relating to customers not receiving frequent flyer miles or claims over supplier insolvency/bankruptcy.
Meet Jeffrey Ment
Jeffrey Ment currently works as a travel law attorney and previously worked as a travel advisor, airline sales manager and tour guide. For more than 28 years, he has represented individuals and companies in the travel industry
Have a question for Jeffrey? Send an email to letters@travelagewest.com.
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