Singapore

Errant travel agents face heavier penalties

Proposed changes in regulations for travel agents aimed at enhancing consumer protection, industry innovation

To protect consumers from errant travel agencies, including those that close down abruptly, the Government is proposing a number of changes to regulations governing travel agents.

These include heavier penalties for those carrying out unlicensed activities, more investigative powers for authorities and stricter requirements concerning proof of financial sustainability.

For example, a banker's guarantee will no longer be accepted when applying for a licence.

Senior Minister of State for Trade and Industry Sim Ann said in a statement yesterday: "The majority of our travel agents are professional and conduct their businesses responsibly.

"But as the travel industry transforms and consumer expectations evolve, we need to update the regulatory framework to safeguard the interests of consumers and also ensure that the business environment allows travel agents to innovate and grow."

There are 1,200 licensed travel agents here. The Consumers' Association of Singapore (Case) said it received 607 complaints against travel agents last year, making it the 10th most complained-about industry.

Just last month, an established agency, Misa Travel, shut down abruptly. Customers were left with about $28,000 worth of unfulfilled packages.

Under the recommendations, new licence applicants will no longer have the option to provide a banker's guarantee in lieu of the $100,000 net worth requirement.

The Ministry of Trade and Industry (MTI) explained that a banker's guarantee does not provide assurance that the travel agent is financially sustainable, and does not provide any direct recourse in the event the agency goes bust.

MTI and the Singapore Tourism Board (STB) are also proposing heavier penalties for those found guilty of carrying out unlicensed travel agent activities. They want the maximum fine per contravention to go up from $10,000 to $25,000.

Under the proposal, STB will also get more investigative powers, such as the authority to take photographs, audio and video recordings that may serve as evidence of wrongdoing.

To reduce the period that consumers are exposed to risk when dealing with potentially errant agents, the Ministry is planning to reduce the time that agencies are given to produce a defence if accused of wrongdoing from 21 days to 14 days.

It added that it may also soon become mandatory by law for travel agents to inform travellers about travel insurance options and keep a record of this.

Mr Ang Eu Khoon, 50, managing director of San's Tours and Car Rental, said: "It's good to have the industry standards spelt out explicitly, so that there will be fewer unlicensed tour guides that damage the industry's reputation."

Mr Michael Chiam, 56, senior lecturer in tourism at Ngee Ann Polytechnic, said: "It is a step in the right direction. The spirit of the changes to this Act is to uphold the norms in the industry, some of which are already being practiced by the established players."

Case executive director Loy York Jiun said that while it supports the overall move to strengthen consumer protection measures, more could be done. This includes making the purchase of travel insurance mandatory.

"We would like to reiterate our call for travel agents to look into insuring their tour packages so that all consumers are covered," he said.

The proposed amendments are a result of 17 discussion sessions with more than 180 participants from the travel industry, including the National Association of Travel Agents Singapore and Case.

The public consultation period, which started yesterday, will end on July 12. More information may be viewed at http://reach.gov.sg, and feedback sent to mti-feedback@mti.gov.sg.

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travelinsuranceMINISTRY OF TRADE AND INDUSTRY (MTI)