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Courting DisasterOctober 1, 2006 By: Travel Agent Central Contributor Home-Based Travel Agent
To Avoid the Courtroom, Follow These Tips
Sue Tanzman worked as a travel attorney for 33 years and is currently the president of Martin's Travel and Tours in West Los Angeles. If potential travel agents took her warnings about the legal pitfalls of the travel industry too much to heart, no one would ever join the business. "I've seen travel agents get sued for some of the most absurd things in the world," she says. "You wouldn't believe what people have sued for."
Stories include instances in which the client sued an agent over lost luggage; because clients could not stow more than 50 pounds in a suitcase; because the hotel did not have a restaurant and because they didn't feel the hotel was up to par. No Hidden Fees
"If you heard what 'par' was in [the clients'] mind you would laugh," says Tanzman. In one case, clients said that "the hotel didn't have turndown service at night. It actually did, but you had to request it. I'm not joking."
Tanzman says she once presided as judge over a case where the client sued because it had rained on their vacation to Hawaii. "Isn't that the most bizarre thing you've ever heard?" she asks. "I ruled against the consumer, of course. The agent had said, 'You'll have beautiful weather,' and it rained for about an hour and that was enough [for the clients] to say it ruined their vacation."
Van Anderson of America's Vacation Center, based near San Diego, says a client once sued an agent (not one of his) because the laundry room door on their cruise ship proved too small. And no, the client didn't even bump his head on the way in.
Scared yet? Surely, those idyllic fam trips to exotic locales are not worth becoming enmeshed in the cogs of the legal system. But there are ways around such troubles, say legal beagles specializing in the travel industry. After all, Tanzman evidently didn't scare easily; she gave up her law business and joined the travel agent ranks, too.
One of the most common pitfalls, according to Tanzman, is not offering clients travel insurance. "There are more lawsuits over that than you could believe," she says. "It's people who cancel [the trip] for some reason and then say that the agency never offered them insurance. They'll haunt the agency."
You're not breaking the law by not offering insurance, but you are leaving yourself open to a civil suit. So not only offer it, but have clients sign a waiver if they decline coverage, Tanzman suggests.
At America's Vacation Center, the in-house software Agent Power automatically e-mails clients after booking, either congratulating them for buying insurance, or noting their decision to decline. "Everything we do is in writing," says Anderson. "If you have a conversation, confirm it with an e-mail or other documentation...It reduces everyone's risk." Get Signatures
Choose your words carefully. Many agents engender risk by letting their enthusiasm boil over into employing superlatives as in, "that's the best" cruise line, destination, hotel or activity.
"There is no such thing as 'the best' because what may be the best for you is not 'the best' for your client," warns Tanzman. "You're leaving yourself open to lawsuits because everyone can dispute what's best."
Another big no-no is saying, "It's the perfect time of year to go because it never rains." "There is no such thing as the best time because it can rain anytime, anywhere, and remember that small-claims court judges are prone to be consumer-oriented," she warns.
Tanzman recommends moderating your language and peppering it with subtle warnings, like, "The weather is usually lovely, but you know, it can rain any day, any time." At Martin's Travel and Tours, agents follow bookings with thank-you notes like, "I'm glad you're going on the cruise. It should be a wonderful vacation. We did discuss the possibility of poor weather, although the chances are slim." "That way," says Tanzman, "you have something in writing to protect yourself without it being a legal document that will scare the client." Register As a Seller
At America's Vacation Center, Anderson says that higher-ups coach agents not to "make promises you can't keep. It's the old adage of under-promise and over-deliver," he says. "It reduces risk: Don't promise, for instance, that a cruise ship will stop in Cozumel. The weather may be any one of many things that could affect [the itinerary]."
But above all else, Tanzman recommends joining a trade association "where you can go to meetings, network with other travel agents in your area and learn these things. That's why ASTA and consortiums are so important for travel agents starting in the industry, because you're not going to know most of these things and there are so many pitfalls, so many places you can make a mistake by what you represent, or don't represent."
Al Anolik has been a travel attorney for more than 30 years, and acts as the in-house attorney for the Association of Retail Travel Agents (ARTA). His web site, www.travellaw.com, is a wonderful legal resource for agents. He's also published several books on the topic.
One of his greatest tips is to only buy airline tickets from agents appointed by the Airlines Reporting Corporation (ARC) or consolidators. "The airlines don't like to admit this," he says, but if you buy a ticket from an ARC-appointed company and the company goes belly-up, the ticket is still good. "The carrier must fly the passenger whether the carrier has been paid or not."
On a related note, Anolik says to always pay for airline tickets with a credit card, allowing you 60 days to challenge the charge if the vendor does not deliver the merchandise.
Including disclosure notices can also close legal loopholes and protect agents in case something goes awry on a client's journey. Check out Anolik's web site for sample notices that can be downloaded. "They basically say, 'I am an agent and I am not responsible if someone else screws up,'" says Anolik. "An agent, under the law, is merely a conduit. You get the money and you pass it along to the cruise line or another agency and you should not be held responsible if something goes wrong." In the same breath, he adds, "Unless you or your people use disclosure notices, you can be at risk when others do something wrong, like go bankrupt or do not pay the bill." Or, he didn't have to say, a cruise ship encounters delays, serves tainted food, or, as crazy as it sounds, does not make the door to the laundry room large enough.
Anolik cites a recent example where an agent booked a $3,100 vacation with now-defunct tour operator Crystal Holidays. The company went bankrupt and the client sued the agent—not Crystal Holidays. Without a disclosure notice, a judge found the agent liable for the cost of the trip. "You don't want to scare a consumer away and play too legal, but if on the front of the itinerary or invoice you say, 'Please read important terms and conditions on other side,' you can go into court and say, 'Your honor, everyone who buys from me gets this paper,'" says Anolik.
But, "even if you don't make mistakes, you're still going to be sued," says Anderson. So the best advice, according to him and travel attorney Jeffrey Miller, is to buy both general liability and errors and omissions policies. "To make it simple, you need a good insurance broker," says Miller. "I would hire one along with a CPA." This second professional is to determine whether to operate as an LLC, LLP, or corporation. Then, litigious clients cannot seek your personal possessions as damages.
In the end, you cannot close all loopholes. You can, however, be very diligent in preparing for the eventuality that a client might try to exploit one.