THE AUSTRALIAN Federation of Travel Agents (AFTA) is planning to do away with its Travel Compensation Fund (TCF) by 2014, due to a lack of consumer awareness and doubts about the fund's efficacy.

The TCF, which provides protection for local consumers in the event of the financial collapse of a participating travel agency, will be replaced by new consumer protection legislation, said AFTA CEO, Jayson Westbury.

“In a 2010 PricewaterhouseCoopers report, only three per cent of consumers surveyed were aware that the TCF was in existence. We do not believe that the TCF adds to the confidence of consumer decisions to purchase via a travel (consultant),” he said.

AFTA estimates that the average travel agency forks out about A$19,500 (US$20,500) a year to cover bonds, administration fees and regulatory red tape when dealing with the TCF.

Rose Yong, managing director of Melbourne-based inbound/outbound tour operator Extragreen Holidays, said her company had not seen any benefits from the TFC in over 18 years of membership.

Tracey Schwass, a travel consultant with Brisbane-based group tour specialist Travel by Tracey, believes the TCF should close as bonds and administration fees are too costly for smaller agencies – at about A$8,000 a year, while a disproportionate amount of time is spent with accountants on regulatory compliance.

“(The TCF closure) will be positive depending on the outcome of the new consumer legislation,” she said.