Registrar Bulletin - Customer Refunds and Trust Accounts
May 6, 2020
Registrants are advised to refer to earlier Registrar Bulletins addressing requirements associated with credit vouchers for future travel services
Customer Refunds
This is to clarify when Section 46 of the Regulation governs the issuance of vouchers for future travel, and when the Section does not govern the original terms & conditions of customer contracts applied to the issuance of refunds.
TICO continues to receive customer complaints concerning cancellation requests made to Registrants consistent with the terms & conditions at the time the travel services were purchased, including when the customer is prepared to forgo a deposit and/or pay a penalty that may have been disclosed at the time of purchase. This includes where Registrants may have indicated that only a voucher for future travel will be provided instead of a refund owing, in situations where Section 46 of the Regulation may not apply.
Section 46 applies if a Registrant acquires rights to travel services for resale and the supplier fails to provide the travel services. A Registrant is considered to have acquired rights to travel services for resale including where it has packaged travel services and marketed and then sold those services for an all-inclusive price.
In a case where Section 46 does not govern, including because the customer’s future travel dates are beyond the declared delay and/or cancellation of travel by the supplier(s) and so the triggering event has not occurred, the customer’s booking is subject to the original terms and conditions that were disclosed at the time the travel services were purchased. All such refund requests should be subject to the original terms and conditions which cannot be unilaterally altered due to COVID-19.
Until March 31, 2021, Section 46 will include a time limited provision that allows registrants to substitute a credit voucher for future travel when the supplier has failed to provide the travel service due to COVID-19. This provision will be revoked from the Regulation on April 1, 2021. Registrants issuing credit vouchers instead of a refund are expected to do so within a reasonable period of time after the cancellation occurs.
Registrants are reminded they must always be accurate and complete in the information they provide about customer options.
Relevant section of the Regulation: 36, 37, 38 and 46
Trust Accounts
Registrants are also reminded of their obligations to comply with all Trust Account regulatory requirements which remain a critical component of consumer protection at all times. Registrants shall not disburse or withdraw customer monies held in trust for any purposes other than to:
- make a payment to the supplier(s) of the travel service for which the customer monies were intended;
- make a refund to the customer; or,
- after the supplier(s) of the travel services have been paid in-full, to pay the Registrant’s commission
The Trust Account may never be used by the Registrant to disburse funds for payments of operating costs such as salaries and wages, rent, advertising, telephone or other overhead costs.
Where a voucher was issued, Registrants must maintain an up-to-date record of all outstanding voucher liability by customer name, unique identifier, the amount and date voucher issued. Registrants are also reminded of the requirement to complete Trust Account reconciliations on a regular basis and at a minimum, when transferring available surplus from the Trust Account to the General Account.