Travel agencies
From the beginning of 2010 to autumn 2012, a lot of travel agencies went bust. 15 out of 21 reported cases of insolvency of tour operators and travel agents took place in 2012. In more than a half of cases the financial guarantees and securities of travel agencies proved too low: there was too little money to reimburse payments (nine cases) made by clients and to cover the costs of their return to Poland (four cases). In extreme cases tourists received effective help from the Province Marshals who paid amounts due and financed their return to homeland. They did it, though, without adequate legal basis, referring to the utmost necessity principle. Nearly half a million zloty in total was spent on bringing the clients of all bankrupt agencies back to Poland (PLN 190 thousand from the budget of the Mazovia Province Marshal, PLN 38 thousand from the budget of the Silesia Province Marshal and PLN 260 thousand from the budget of the Wielkopolska Province Marshal).
According to NIK, the source of problems of Polish tourists was a faulty scheme of calculating the guarantee amount. Both the domestic and the EU provisions put it clearly that it is the tour operator that, even in case of insolvency, is responsible for its clients’ return to Poland. The state (all taxpayers) may not act as rescuer of the budgets of private companies operating on the tourist market. That is the reason why NIK proposes to establish provisions that would oblige travel agencies to have proper guarantees, e.g. in the form of insurance covering the cost of return of all clients to Poland. The law is to make sure that the bank guarantees, insurance guarantees or insurance held by a travel agency provide effective and sufficient protection for clients.
Interview with Ilona Kielan-Glińska from the Department of Science, Education and National Heritage
Travel agencies 2
The level of obligatory guarantees is the key condition for them to be effective. The amount required by law should secure the tourists’ return to their homeland. NIK recommends also considering guarantees due to potential claims related to services that were paid but not provided. NIK requests changes in the law and increase of the securities level. The existing and still effective level of securities has two weaknesses: it is disproportional to the costs of organised events and calculated proportionally to the archived data (the security level depends on the level of income generated in the past year). It allows entrepreneurs to pay the guarantees regardless of the present number of clients of the travel agency and the value of contracts concluded with them. NIK stands in a position that such guarantees should be calculated in relation to the number of clients being on holiday at the given moment and the value of contracts concluded with them.
In response to NIK’s recommendations, the Minister of Sport communicated that works had already started on amending ordinances concerning guarantee amounts and obligatory insurance, and also on the draft Tourist Guarantee Fund Act.
In order to limit the risk on part of tourists, the state should have effective instruments of supervision over the activity of travel agencies. They would play the role of a fine sieve, by eliminating dishonest organisers and agents from the market (whose financial standing does not guarantee that they will meet the contract obligations). This may be achieved by:
- broadening the scope of audit of tour operators and travel agents, including among others audit of their financial standing and securities level - at the moment the state does not have enough tools to effectively supervise if the securities paid by travel agencies have been correctly calculated;
- further specifying provisions of the Tourist Services Act and possibly indicating entities responsible for organising the client’s return to Poland in extreme cases, e.g. in case of dishonest entrepreneurs or natural disasters.
Apart from that, NIK postulates to make changes in the law to enable tourists to find complete information on the given travel agency. Currently, a lot of information should be available in the existing registers: of the Ministry’s Central Records of Tour Operators and Travel Agents as well as local Registers of Tour Operators held by the Province Marshals. The NIK audit results revealed, however, that the data kept in those registers happen to be outdated and incomplete. Minor irregularities concern both clearly formal issues, such as incomplete addresses but they are also related to critical matters. For instance, a lot of records are missing. They concern e.g. the fact that an agency has been deleted from the records, that court proceedings has been instituted against the agency’s owner, that the tourist activity of an agency has been banned or limited or that the financial security has lost its continuity. Delays in making entries to registers reach even 3 months which may prove critical when it comes to tourists planning their holidays. There were also numerous discrepancies between the Records and the Registers. Because of these errors and delays, a tourist that would like to check a travel agency has to do it twice - in each register separately.
Each potential client of a travel agency may increase his or her chances for a quiet holiday and a stress-free return to Poland in a simple way. All you have to do is to know and use your rights.
In this case citizens may seek a helping hand with the government administration (Ministry of Sport and Tourism, Province Marshals) as well as other public institutions, organisations or associations (like the Office of Competition and Consumer Protection, Spokesperson of the Insured). Most information, though, can be found in the travel agency whose services we want to use: the owner and organiser are simply obliged (and this is not the question of their good will) to provide the tourist with all the data confirming the company’s reliability and financial condition (related e.g. to insurance, means of transport or the way of filing complaints).
What can we learn about a travel agency in that agency?
A tour operator or travel agent is obliged to provide clear, reliable, true and understandable information to the client. The contract should precisely specify e.g. the price of the service/ trip/ tour including taxes and extra fees (e.g. for visas), place of stay or trip route, type, class and category of the means of transport, location, type and category of accommodation facility (in line with the regulations of the country of stay), number and type of meals, visiting programme, services included in the price, date of notifying the client in writing of possible cancellation of the tour. The contract should also contain a clause concerning the manner and date of filing claims and complaints.
In case of travels for children, before the tour the operator should provide clients with information on the ways of directly contacting the child or the person responsible in the child’s place of stay.
Operators of overseas tours are obliged to conclude contracts on casualty insurance and costs of treatment for persons taking part in those tours. In case of a client who pays for his or her holiday the whole amount or an advance exceeding 10 percent of the entire amount, the organiser is also committed to give that client a written confirmation of either bank- or insurance guarantee or insurance for clients in case of the operator’s insolvency, including the manner of applying for the guarantee funds.
The Spokesperson of the Insured may give free advice on how to choose an adequate tourist insurance. You may raise your questions or doubts in any form: by post, by phone, e-mail or in person (seat in Warsaw).
Where can you find extra information and what is it precisely?
The Marshals of all provinces keep regional Registers of Tour Operators including information on travel agencies operating in the given area. All this information in a single nationwide register - the Central Records of Tour Operators and Travel Agents is gathered by the Ministry of Sport and Tourism. Verification of those registers will show if the chosen travel agency operates legally and meets all safety conditions. The regional registers are kept in an electronic or paper version. They are available for all but the manner of asking questions depends on the region: in most cases a phone call is enough but in some public institutions you need to appear in person. The Central Records are placed on the sub-site of the Minister of Sport (www.turystyka.home.pl) and are commonly available. Everyone may demand any information concerning the travel agency of his or her interest. Questions may be asked in any convenient form: in person, by phone, by e-mail or post.
The Central Records include among others: record number of the travel agency, date of entry to the register, full name and address of the company, exact specification of the form and area of activity (e.g. only Poland, Europe, whole world). These data should be consistent with the data provided by the travel agency and mentioned in the contracts.
It is particularly important to check the following: form and level of financial security and name of the guarantor, as well as potential clauses on deleting the given agency from the register or on a ban on activity.
It is also worth paying attention to how long the agency has already been active on the market. It is no rule but many of the agencies that went bust existed for a short period of time: a few or a dozen or so months.
NIK points out, however, that the data in the registers are often outdated and incomplete. Minor irregularities concern both clearly formal issues, such as incomplete addresses but they are also related to critical matters. For instance, a lot of records are missing e.g. about deleting an agency from the register, instituting court proceedings against the agency’s owner, ban or limitation of tourist activity or the loss of continuity of financial security. Delays in entries to the registers reach 3 months.
The Office of Competition and Consumer Protection [UOKiK: Urząd Ochrony Konkurencji i Konsumentów] runs a special register of contractual clauses considered as not allowed, the so-called register of banned clauses. This is a list of clauses, conditions or phrases which are illegal and infringe the good and rights of the client. No phrases from the register may be included in contracts or general terms and conditions concerning participation in a tour. At the beginning of October 2012, the clauses register contained 3769 banned clauses of which as many as 1/3 dealt with tourism. As regards analysing contracts with travel agencies, there are dedicated consumers’ spokespersons who provide assistance free of charge (dense network of field offices).
If a travel agency uses any of banned clauses in its contract, it breaches the law. In such a case the President of UOKiK may consider that as infringement of consumer interests and impose a fine on that entrepreneur.
The UOKiK data show that 63 percent of travel agencies when concluding contracts with consumers applies clauses that may be unfavourable for tourists. The agencies most often use imprecise specification of the means of transport and category of a hotel facility. The lack of information on the insurer or the manner of filing claims and complaints makes it difficult or even impossible for the aggrieved tourist to file a complaint (it happens that there is no such clause or the existing one is imprecise).
Nevertheless, NIK wants to underline clearly that even an in-depth analysis of the information on a specific travel agency will not provide absolute protection against a dishonest tour operator which deliberately misleads its clients. The state has no capacity to control financial liquidity of a private company - only the owner knows it.
Important additional information: in case of any problems during a stay abroad (e.g. an agency’s bankruptcy or a natural disaster) in justified circumstances tourists may seek assistance (e.g. in the form of financial support, even as non-returnable amount to cover the travel back to Poland) with the local consulate of the Republic of Poland.
