USTOA's Consumer Protection Plan
Life includes risk, and vacations are no exception. While the vast majority suffer nothing worse than an occasional rainy day, problems sometimes arise. And that makes consumer protection an important consideration in any of your holiday plans. "Our organization's No. 1 priority is to make sure that when that does happen, the consumer does not get stuck," says Robert Whitley, president of the United States Tour Operators Association.
The USTOA acts in two ways. First, all its members are required to hold a minimum of $1 million in professional liability insurance, issued by an A or A + rated insurance company, licensed in all 50 states and written on a worldwide basis.
Second, and most important, is the organization's $1 Million Consumer Protection Plan. It requires each member to furnish cash, securities, an individual indemnity bond or an irrevocable, collateralized letter of credit in the amount of $1 million to the USTOA. If the firm fails, that money is available to reimburse all customers who have made payment for trips that are cancelled.
It has happened: Since the program was created in 1978, the USTOA has refunded $7.5 million to its members' customers. The worst year was 1991, when the Persian Gulf War suddenly depressed overseas travel, leaving many tour operators holding the bag.
"Three companies in the USTOA went down as a result of the Gulf War," says Whitley. "We refunded 100 percent, and in most cases the customers didn't even lose their vacation." After that event, USTOA tightened up its membership requirements even further; as a result, there have been no bankruptcies for more than four years.
There are other advantages of booking with USTOA members. Their very participation in the plan is a sign of financial stability, and it is based on a stringent screening process. Please take a moment to look through the directory at right-your guide to the best in the tour business.