Melbourne man Geoff Berlowitz isn’t big on holidays.
Key points:
- Another Helloworld Travel franchisee has gone bust in suburban Melbourne
- The collapse of the Mill Park outlet has left 56 customers out of pocket
- Consumers say Helloworld’s head office has declined to help them
“I mean, Coburg would be a big trip for me,” he said with a wry smile, referring to the suburb just down the road.
So, in 2019, when he and his wife Margaret paid $22,500 for a tour to see Canada and Alaska, scheduled for May 2020, it was a big deal.
“We didn’t sort of spare any expense. We thought bugger it, let’s just spend it and have a good time,” he said.
Then the coronavirus pandemic hit in March 2020, their trip was cancelled, and they waited for their travel agent — Helloworld Travel Plenty Valley — to get them a refund or a credit from the tour operator.
“Each month it was excuse after excuse…. but the main thing he was saying was he was waiting on Evergreen [the tour operator] to return the money,” Margaret said.
But Evergreen later told the family the travel agent had only ever paid them the deposit.
The Helloworld franchisee lost $21,500 of their money, as the Mill Park business slowly went under.
In July this year, it went into liquidation, owing the Berlowitzs and 55 other customers a combined $340,000, according to administrator Mackay Goodwin.
Helen Harrison is also owed $7,000 from the travel agent.
She had booked airline tickets for her family to travel to the United States in March last year — one final family holiday before her daughters finished high school.
After she canceled the trip, she was told repeatedly by the store that the airline wasn’t issuing refunds, and she’d need to take a credit.
“So we thought, well, that’s better than nothing,” she said.
After the store went into liquidation, she was told by the airline that it had refunded her money in April this year.
Helloworld Travel Plenty Valley held on to it before going under three months later.
“Realizing that somebody actually got your money back and then didn’t bother to let you know, when you’ve been chasing it for 12 months, it’s just awful,” Ms Harrison said.
“$7,000 is a lot of money to lose … we’d saved up for a few years for it,” she said.
The Plenty Valley store was the latest of at least four Helloworld Travel agencies to go bust in Melbourne’s north and east.
In February, Helloworld Travel Monbulk and Bentleigh went into liquidation, owing $68 thousand to 53 clients, while in September 2020, Helloworld Belgrave went under.
The franchiser, Helloworld Travel, has 2,224 stores across Australia and is worth $280 million, but Margaret Berlowitz said when she asked the head office to give her money back, they wiped their hands of the issue.
“They virtually said ‘It’s not our problem. It’s a franchise’,” she said.
The Berlowitzs say the only reason they booked with Helloworld, and not an independent agent, was because they assumed they were dealing with a big company and their money would be safe.
“We presumed Helloworld was all one company, under one name,” Margaret said.
Helen has also been demanding that the head office give her her money back, to no avail.
“It’s just not good enough,” she said.
Helloworld Travel declined to respond to questions about the issue.
Last week, reflecting a horror 18 months for the travel industry, it posted an un-audited full-year loss of $35.9 million.
Calls for better regulation of travel agents
Consumer advocate Adam Glezer said the situation showed the need for better regulation of all travel agents, including the use of trust accounts for customer funds.
“Lawyers require them, real estate agents require them,” he said.
“Why are they not required with travel agents?”
The government-run Travel Compensation Fund (TCF) used to cover consumers in the event that a travel agency went bust, but it was abolished in 2014.
Agencies are now self-regulated, through the Australian Federation of Travel Agents (AFTA), which also represents Helloworld Travel.
In a statement, AFTA said more regulation of travel agents was not necessary and its agents had been tireless in their efforts to secure refunds and credits for people who couldn’t travel due to COVID-19.
It says travel agents who are members of the International Air Transport Association (IATA) are required by that organization to maintain a trust account for airline ticket purchases.
“Additionally, travel agents should already have a trust or client account [for other transactions],” the statement said.
“Consumer and Criminal Law applies to all agencies as with the wider population, and, while not commenting specifically on any case, remedies are already in place for breaches including for fraud.”
None of the Helloworld franchisees are facing any criminal or civil charges and no suggestion is made by the ABC that they are involved in any criminal conduct.
Mr Glezer, who runs Facebook pages for would-be travelers left in the lurch during the pandemic, believes more needs to be done to prevent travel agents spending customer money on expenses other than the holidays that customers have booked.
“What we have got to do is actually fix the problem that is in front of us to ensure this does not happen moving forward,” he said.
In June, Liberal MP Kevin Andrews put a motion to federal parliament for better regulation in the industry, which was seconded by Labor MP Michael Freelander.
The issue has stalled since then.
But for the Berlowitzs and the Harrisons, the fight with Helloworld Travel continues.
“I’m not going to let this go,” Ms Harrison said.
“Just wiping their hands of this is unacceptable.”
For Geoff Berkowitz, the experience has left such a bad taste, he said he probably wouldn’t travel overseas again.
“I’d rather spend money on something else,” he said.
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