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Protect Your Commissions

December 10, 2007 By: Travel Agent Central Contributor Travel Agent

AN AGENT RECENTLY E-MAILED with a vexing problem, one that I hope not many of you have endured. The agent had done business with a tour operator that shut down after the client had traveled. Calls placed in regard to the agent's outstanding $2,000 commission went unreturned, as did Travel Agent's calls seeking comment on the situation.  —Ustoa's Bob Whitley

The next step was to call Bob Whitley, president of the United States Tour Operators Association, for his advice on the situation. The tour operator was not a member of USTOA (which held its annual conference in Cancun last week), and although Whitley said it's unlikely the agent would get the money owed to him, he did provide insight on how to prevent similar circumstances in the future.

Travel Agent: In such a case, what are an agent's options for getting that commission check?

Whitley: My experience is that they won't be paid. If the tour operator declares bankruptcy, the agent can file as a creditor and fill out forms to be listed as a creditor to receive any assets. But when most companies close, they do not file bankruptcy, because the cost is more than what they owe. If the tour operator did file bankruptcy, the agent would have received a notice. The other option is to make a complaint to the attorney general's office [in the state where the tour operator is based].

Travel Agent: How can agents prevent this scenario from happening?

Whitley: Having a customer pay by check is the safest option for an agent's commission. With a check payment, the agent [takes] the commission and sends the remaining balance to the tour operator. However, paying with a credit card is the safest bet for the customer.

Travel Agent: That's a tough choice for an agent. Is there anything else that can be done?

Whitley: This is why we recommend agents book members of USTOA. We have our consumer assistance program, which helps to rebook travel plans if a tour operator goes out of business. It does not cover commissions, but if a tour operator goes out of business and a customer travels anyway, the agent will keep that client. —JENNIFER MERRITT

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