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In case of a bankruptcy of a travel agency, you have the chance of losing all the money that you already paid. Therefor, there are associations of which a travel agency (of any size) can become a member. Customers of a bankrupt agency are, by the means of this membership, somehow protected a bit against bankruptcy of the service providers.

My question is, does such an association exist for travel agencies in the USA, and up to what degree is a customer covered?

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Is this true? If a travel agency books you a flight and a hotel and then bankrupts i think you still have your tickets. –  Vitalik Mar 9 at 20:42
    
@Vitalik What if you book a bus/plane trip with a travel agency, who also operates the bus/plane? In many cases you might be fine, but there might be exceptions. –  Bernhard Mar 9 at 20:46
    
I think you're mistaking Assocication of Travel Agents like ASTA with the agencies like FDIC or SIPC –  Karlson Mar 9 at 22:33
    
In the UK, if your travel booking is ATOL Protected then you'll be covered in the event of any of the companies involved going bust, including getting you home a different way if it's the company flying you who's gone. You need to book two things (travel, hotel, car etc) to be covered, and through an appropriate agent, but coverage is very good then. No idea if there's a US version though... –  Gagravarr Mar 10 at 4:59

1 Answer 1

up vote 2 down vote accepted

Such organizations generally only occur by government mandate, as buying insurance (given that's what the combined funds are) is always a cost on a business.

There are no overall regulations. You will need to consider where the travel agent you're buying your travel from is located, and review the latest regulations of that state. The safest bit is always to purchase travel insurance that includes travel agency bankruptcy from a separate source to your travel agency.

The most relevant information as to what exists in the USA was off a legal website, and they note that the regulations vary significantly from state to state.

Several laws that affect sellers of travel are common to most U.S. jurisdictions. These include:

...

  • Claim forms. These regulations have increased in number and complexity with the greater use of travel restitution statutes. Many states have enacted laws requiring claims forms to be issued to the consumer when purchasing travel services. These forms are used by the consumer to file a claim against the seller of travel, to be collected from the state’s restitution fund, if the seller of travel or the provider of travel goes bankrupt or is otherwise unable to deliver the travel services.

The following states have laws for registration, licensing, or bonding of sellers of travel or otherwise governing travel sales: California, Delaware, Florida, Hawaii, Illinois, Iowa, Louisiana, Massachusetts, Nevada, New York, Oregon, Pennsylvania, Rhode Island, Virginia, and Washington (State). However, seller-of-travel regulations are in flux. For example, in 2003 Ohio repealed its registration program. California law was revamped in 2007 to expand the scope of services that are covered by the seller-of-travel laws.

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