TICO Module 5 2023 Solved 100%

Purpose of the travel Industry compensation Fund - ANSWER-to protect consumers who purchase travel services from Ontario-registered retailers If travel services cannot be provided because of the financial failure of a registrant or an airline or cruise line end supplier, then a consumer may be eligible to receive compensation from the Fund Travel Industry Compensation Fund Notes - ANSWER-"Compensation Fund" Consumers do not have to live in Ontario to be covered by the Fund. As long as consumers purchase travel services from an Ontario registered travel agency, they are protected by the Compensation Fund in the event that they do not receive their travel services as a result of the failure of an Ontario registered travel retailer, an Ontario registered travel wholesaler or an airline or cruise line TICO has the legal right to borrow money to supplement the Fund Compensation Fund is made up of - ANSWER-contributions made by registrants any money borrowed under this or an earlier Regulation recoveries of money paid from the Fund income earned on the money in the Fund A registrant is required to reimburse the Fund for any claims paid to the registrant's customers under the following circumstances - ANSWER-the registrant is bankrupt or insolvent or has ceased to carry on business the registrant purchased travel services on the customer's behalf, extending credit to the customer the customer paid the registrant for the travel services after the supplier of the travel services had become bankrupt or insolvent or ceased to carry on business Payments to Finance the Fund - ANSWER-travel agent or travel wholesaler must contribute to the Travel Industry Compensation Fund Contributions must be made twice a year (6-month interval), with each payment based on the company's gross sales in Ontario When registrants make payments to the Fund, each payment must be accompanied by a completed return that shows the registrant's sales in Ontario for the preceding fiscal half-year and the amount owing to TICO. This return must be certified for accuracy by the registrant or an authorized officer or partner of the registrant Eligibility to Make a claim - ANSWER-two possible types of claim on the Travel Industry Compensation Fund -Standard Claim -Trip Completion Expense Claim Standard Claim - ANSWER-for travel services that were paid for but not provided as a result of the failure of an Ontario-registered travel agent, an Ontario-registered travel wholesaler or an airline or cruise line A customer, a travel agent or a travel wholesaler may make a standard claim Trip Completion Expense Claim - ANSWER-for reasonable expenses incurred to complete a trip where a customer or another person has begun a trip that cannot be completed because travel services have not been provided as the result of the failure of a TICO registrant customer or a travel agent may make a trip completion expense claim TICO Board of Directors is responsible for - ANSWER-determining whether all or part of a claim is eligible for reimbursement deciding on the eligible amount of a claim Consumers (Standard Claims) - ANSWER-Consumers who have booked and paid for travel services through a registered travel agent may make a claim against the Fund consumer whose booking was not made through a registered travel agent is not eligible to make a claim. Before making a claim against the Fund, a consumer must first seek payment from any other person or company that may be legally obligated to reimburse or compensate them (insurance company/credit card company) consumers are eligible to make a claim only if no other party has reimbursed them Claims can only be made against the Fund for the non-provision of travel services for two reasons - ANSWER-the bankruptcy or insolvency of a registrant the failure of an airline or cruise line end supplier Travel agents (Standard Claims) - ANSWER-can make a claim on the Compensation Fund if the following requirements are met: - customer must have booked and paid for the travel services through an Ontario-registered travel agency - travel agent must have dealt with a registered travel wholesaler, an airline or cruise line in good faith and at arm's length - travel agent must have passed all or part of the customer's money to the travel wholesaler, airline, or cruise line - The travel agent has either: = refunded the customer (If the travel agent is still holding any of the customer's money, the travel agency is responsible for refunding that money to the customer) = provided alternative travel services for the customer because the original services were not provided because of a registrant or airline or cruise line failure (Condition does not apply if the travel agent has acquired the rights to the travel services for resale.) - It is clear that the customer would have an eligible claim against the Compensation Fund Travel Wholesalers (Standard Claims) - ANSWER-can make a claim on the Compensation Fund for money it has paid out to: -reimburse a customer for travel services paid for but not provided -provide the customer with travel services for which the travel wholesaler has not been paid by the travel agent Travel Wholesalers claim applies only if: - ANSWER-travel agent is a registrant travel wholesaler dealt with the travel agent in good faith and at arm's length travel agent failed to pass all or part of the customer's money to the travel wholesaler travel wholesaler has had no previous dealings with the travel agent in which the travel agent failed to pass the customer's money to the travel wholesaler (or defaulted in another way) travel wholesaler has taken reasonable measures to ensure that the travel agent is reliable and financially responsible travel agent received the customer's money and it is clear that the customer would otherwise have had a claim against the Fund amount of any reimbursement can apply only to the portion of the customer's money that the travel agent received but failed to pass on to the travel wholesaler Claims limit on the Compensation Fund - ANSWER-maximum refund is $5,000 per person maximum payable for claims for reimbursement or immediate departure in response to any single event or "major event" is $5 million, plus any money TICO can recover from third parties If all claims for an event exceed $5 million, TICO will *prorate the claims it receives *assess and divide the claims proportionately additional $2 million may be paid from the Fund for trip completion to assist travellers who are stranded in a destination. Trip completion includes payments directed by the Director for trip completion and claims for trip completion expenses approved by the Board. If $2 million is not enough to cover this cost, the Director may, with the Board's approval, call for additional funds to be used for "trip completion" Additional funds cannot exceed $5 million, will be deducted from the $5 million available to reimburse consumers for claims or to pay for "immediate departures" because of the event in question Payments for trip completion take precedence (first paid out) over other claims on the Fund Decision making for major events - ANSWER-Director has the power to decide whether or not an event is a major one In making that decision, they must consider: - nature of the events - number of claims arising/potentially arising from the event - need to protect the Fund