Kemp Little
  • Looking for someone?
  • Email us
  • Search
MENU MENU
Insights overview

Commercial technology · 7 February 2020 · Farina Azam

The best way to learn from Thomas Cook and safeguard your agency | TTG media

Agreements between agents and tour operators are crucial to protect both parties, as the Thomas Cook failure proved. The Thomas Cook failure highlighted a number… Read more

more content below

Notice: Undefined variable: people_info_class in /home/kemplittle/test.kemplittle.com/wp-content/themes/kemplittle/single.php on line 210

Agreements between agents and tour operators are crucial to protect both parties, as the Thomas Cook failure proved.

The Thomas Cook failure highlighted a number of flaws in the way tour operators and travel agents deal with each other – which was ultimately to the detriment of customers.

To prevent this happening again, agency agreements must be updated.

In the pipeline

One of the main issues that arose from Thomas Cook’s collapse was its practice of requesting customer payments early and holding them for a significant time period.

While payments are held by the agent (commonly known as “pipeline monies”), they are at risk if the agent was to financially fail – unless financial protection is put in place, such as Abta’s retail agent financial protection scheme.

In order to provide protection, the following payment terms must be included in the agency agreement:

Remittance within 14 days: agents should be contractually obliged to pass all customer payments on to the tour operator within 14 days of receipt.

If the agent is bonded with Abta, pipeline monies will only be protected by its financial protection scheme as long as: the tour operator did not offer any credit terms to the agent; payment is remitted within 14 days of receipt from the customer; and the tour operator chases any outstanding payments regularly (and in accordance with Abta’s credit control procedures – visit abta.com for more information).

Prohibition on agents collecting payments early: agents should not be permitted to collect customer payments before the balance due date (or to offer incentives or discounts to customers to make early payment), and if customers do make unprompted payments before the balance due date, this should be remitted to the tour operator within 14 days of receipt by the agent.

This reduces the risk of an agent financially failing while holding pipeline monies.

Tour operators cannot prevent agents from offering discounts or incentives more generally: to do so would be a restraint of trade.

Provided agents still pay the net sum to tour operators, agents are permitted to offer discounts and incentives to win bookings – but they must still remit those payments to tour operators in accordance with the agency agreement’s payment terms.

Passing on documents

When Thomas Cook failed, there was confusion among customers about who their booking was with, with many not realising their holiday was actually with a third-party tour operator and could still be provided.

To reduce the risk of this happening again, there should be a contractual obligation on agents to pass on to the customer the tour operator’s confirmation invoice and other paperwork that makes it clear the customer’s contract is with the tour operator.

If the agent issues their own paperwork to the customer, they should make it clear that they are acting as an agent on behalf of the tour operator (this is also critical from the agent’s perspective to ensure they don’t end up liable to the customer for provision of the holiday – and to protect the agent’s Toms status).

Data sharing

To ensure data sharing between the agent and tour operator is GDPR-compliant, there should be properly drafted data sharing clauses in the agency agreement.

 

This article was first posted on TTG media. Read the original here.

  • Share this blog

  • Twitter
  • Facebook
  • Linkedin

Farina AzamFarina Azam is a commercial technology partner

Get in touch

View the team

Sign up for our newsletters

  • Share this Blog

  • Twitter
  • Facebook
  • Linkedin

Other stuff you might like


    Notice: Undefined variable: show_default in /home/kemplittle/test.kemplittle.com/wp-content/themes/kemplittle/single.php on line 349
  1. The best way to learn from Thomas Cook and safeguard your agency | TTG media
  2. Coding and law: how coding made me a better paralegal
  3. Excite Holidays cease trading – agent’s legal obligations | TTG
The hottest topics in technology
  • Adtech & martech
  • Agile
  • Artificial intelligence
  • Brexit
  • Cloud computing
  • Complex & sensitive investigations
  • Connectivity
  • Cryptocurrencies & blockchain
  • Cybersecurity
  • Data analytics & big data
  • Data breaches
  • Data rights
  • Digital commerce
  • Digital content risk
  • Digital health
  • Digital media
  • Digital infrastructure & telecoms
  • Emerging businesses
  • Financial services
  • Fintech
  • Gambling
  • GDPR
  • KLick DPO
  • Open banking
  • Retail
  • SMCR
  • Software & services
  • Sourcing
  • Travel
close
The hottest topics in technology
  • Adtech & martech
  • Agile
  • Artificial intelligence
  • Brexit
  • Cloud computing
  • Complex & sensitive investigations
  • Connectivity
  • Cryptocurrencies & blockchain
  • Cybersecurity
  • Data analytics & big data
  • Data breaches
  • Data rights
  • Digital commerce
  • Digital content risk
  • Digital health
  • Digital media
  • Digital infrastructure & telecoms
  • Emerging businesses
  • Financial services
  • Fintech
  • Gambling
  • GDPR
  • KLick DPO
  • Open banking
  • Retail
  • SMCR
  • Software & services
  • Sourcing
  • Travel
Kemp Little

Lawyers
and thought leaders who are passionate about technology

Expand footer

Kemp Little

138 Cheapside
City of London
EC2V 6BJ

020 7600 8080

hello@kemplittle.com

Services

  • Commercial technology
  • Consulting
  • Disputes
  • Intellectual property
  • Employment
  • Immigration

 

  • Sourcing
  • Corporate
  • Data protection & privacy
  • Financial regulation
  • Private equity & venture capital
  • Tax

Sitemap

  • Our people
  • Insights
  • Events
  • About us
  • Contact us
  • Cookies
  • Privacy
  • Terms of use
  • Compliants
  • Debt recovery charges

Follow us

  • Twitter
  • LinkedIn
  • FlightDeck
  • Sign up for our newsletters

Kemp Little LLP is a limited liability partnership registered in England and Wales (registered number OC300242) and is authorised and regulated by the Solicitors Regulation Authority. Its registered office is 138 Cheapside, London EC2V 6BJ. The SRA Standards and Regulations can be accessed by clicking here.

  • Cyber Essentials logo
  • Tech Nation logo
  • LORCA logo
  • ABTA Partner+ logo
  • Make Your Ask logo
  • FT Innovative Lawyers 2019 winners logo
  • Law Society Excellence Awards shortlisted
  • Legal Business Awards = highly commended
  • Home
  • Our people
  • Services
    • Commercial technology
    • Consulting
    • Corporate
    • Data protection & privacy
    • Disputes
    • Employment
    • Financial regulation
    • Immigration
    • Innovation
    • Intellectual property
    • Private equity & venture capital
    • Sourcing
    • Tax
  • Insights
  • Quick reads
  • Events
  • About us
    • Who we are
    • Our social responsibilities
    • Our partnerships
    • Join us
  • Contact us
  • FlightDeck
  • LORCA
  • Sign up for our newsletters
  • Follow us
    • Twitter
    • LinkedIn
close
close
close

Send us a message

Fill in your details and we'll be in touch soon


Notice: Trying to get property of non-object in /home/kemplittle/test.kemplittle.com/wp-content/plugins/contact-form-7-dynamic-text-extension/contact-form-7-dynamic-text-extension.php on line 330

close

Sign up for our newsletter

I would like to receive updates and related news from Kemp Little *

Please select from the areas of interest below.

Themes

Services

Please select below any publications that you would like to receive:

Newsletters

close

Register for future event information

close
close
Looking for someone?
Generic filters
Exact matches only

Can't remember their name? View everyone

  • Home
  • Our people
  • Services
    • Commercial technology
    • Consulting
    • Corporate
    • Data protection & privacy
    • Disputes
    • Employment
    • Financial regulation
    • Immigration
    • Innovation
    • Intellectual property
    • Private equity & venture capital
    • Sourcing
    • Tax
  • Insights
  • Quick reads
  • Events
  • About us
    • Who we are
    • Our social responsibilities
    • Our partnerships
    • Join us
  • Contact us
  • FlightDeck
  • LORCA
  • Sign up for our newsletters
  • Follow us
    • Twitter
    • LinkedIn