The move to close down the Travel Compensation Fund (TCF) which protects travel consumers would leave many Australians out of pocket when travel agents go bust, according to people’s watchdog company CHOICE.

CHOICE is urging Consumer Affairs Ministers in Australia to reject the proposal to abolish the protection scheme in the new Draft Travel Industry Transition plan, arguing that the proposed changes will leave travellers high and dry.

CHOICE head of campaigns Matt Levey said just recently, more than 5,000 passengers that were booked on cancelled ‘Athena cruises’ were told to contact the Travel Compensation Fund, with most believed to have paid 40 percent of the total cruise deposits.

“If the Fund is abolished, Consumer Affairs Ministers need to explain where they will direct people next time a travel company fails, recognising that one-third of travel expenditure is still done through agents, often for very expensive holidays,” Mr Levey added.

Abolishing the TCF means consumers would rely on their credit card ‘chargeback’ protections, travel insurance or industry accreditation scheme arrangements.

Along with other consumer groups and parts of industry, CHOICE believes these options in the draft are inadequate as not everyone pays with credit card and most existing travel insurance products don’t cover the insolvency of travel agents.