The Consumers Association of Singapore is pushing for travel agencies to take out insurance against sudden closure, to protect customers ("Case pushing for travel agent insurance"; Monday).
It is helpful to look at the experience in the United States, where there is the so-called Travel Money Protection Plan.
Under it, the consumer places his payment into an escrow account. Such funds are kept separate from the travel agency's operating funds. Also, it is mandatory for a certified public accountant to conduct an annual review of the agency's financial receipts record.
After the consumer has returned from his trip, the funds are released to the travel agency.
If the agency ceases to operate, the consumer can file a claim for the funds in the escrow account.
Even though the travel and tourism industry is on the rise in Singapore, there is a dearth of lawyers specialising in travel law.
The Travel Agents Act, which was enacted in 1975, offers little protection for consumers.
To protect unwary travellers, it should be more specific on issues like advertising, misrepresentation, disclosure, delivery of tickets, bond and trust accounts, and claim forms.
The Act should be updated as new legal issues will arise when travel agencies switch from being brick-and-mortar establishments to online entities.
Heng Cho Choon
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