Note: This information was last updated September 2023
Tips to protect yourself
Minimise your risk before booking your holiday by:
Paying for it with your credit card
Checking with your travel agent to see if they have their own insolvency protection cover
Reading your travel insurance policy carefully to understand what you are covered for in such situations
If you are unable to recover your money any other way, some Australian states and territories have programs in place where you can claim compensation for losses to insolvent companies. You can find out more by contacting the ACCC.
Finder survey: What is the biggest concern for Australian travellers?
Response
Flight disruptions/cancellations
57.82%
Being hospitalised
47.75%
Losing luggage/belongings
46.4%
Crime - theft
35.97%
Catching COVID-19
20.68%
None of the above
8%
Other
1.44%
Source: Finder survey by Pure Profile of 1112 Australians, December 2023
Credit card chargebacks: What are they, how do they work and how long do I have?
Currently in Australia, a credit card chargeback is one of two ways you can get your money back if your travel agent goes broke. This is only because there are consumer protection rules associated with the use of Visa, MasterCard and American Express credit cards.
When you apply for a credit card for a chargeback, your provider will examine the evidence and if they find cause will reverse the transaction, which returns the money paid to your credit card.
As long as you purchased your holiday on your credit or debit card and selected "credit" when you paid, you have a good chance of being compensated for travel agent insolvency.
Common reasons for chargebacks include:
Unauthorised transactions. Someone uses your credit card details without your permission.
Duplicate processing. You are charged more than once for a purchase.
Direct debits. A direct debit continues after you have cancelled it.
Merchandise not received. You do not receive the merchandise or service you paid for (this would include travel agent insolvency).
While chargebacks can be a lifesaver, it’s important to remember there are time limits. These limits vary but generally you have between 30 and 120 days from payment to apply for a chargeback.
Don’t get caught out
With only a handful of Australian insurers covering travel provider insolvency and none covering travel agent insolvency, sometimes a traveller’s only recourse is to either use their credit card to pay for their holiday or find a travel agent with insolvency protection.
Before taking out a travel insurance policy, make sure you’ve checked if it covers provider insolvency at the very least.
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Frequently asked questions
Currently, Australian travel insurers do not cover travel agency insolvency. But for most of the time, that should be okay since travel agencies don't usually operate the flights or hotels anyway.
If a provider such as a tour operator or airline becomes insolvent, there are several ways you may be able to recover your money.
The travel agent may be able to get a refund for you, or at least help you get home if you’re stranded mid-holiday
If you paid for your holiday on your credit card, you may be able to request a chargeback from your credit card provider and have the money returned to your credit card
If your travel insurance policy includes insolvency of a travel provider, you will be covered up to a certain benefit amount
However, there are no travel insurance policies that provide cover if your travel agent becomes insolvent. The only way to recover your money is by requesting a chargeback from your credit card company or being compensated through your travel agent’s insolvency cover.
Gary Ross Hunter was an editor at Finder, specialising in insurance. He’s been writing about life, travel, home, car, pet and health insurance for over 6 years and regularly appears as an insurance expert in publications including The Sydney Morning Herald, The Guardian and news.com.au. Gary holds a Kaplan Tier 2 General Advice General Insurance certification which meets the requirements of ASIC Regulatory Guide 146 (RG146). See full bio
Gary Ross's expertise
Gary Ross has written 725 Finder guides across topics including:
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