Free TICO Destination Knowledge Questions and Answers 1 — Questions and Answers
Question 1: The Travel Industry Compensation Fund applies to
- Manitoba consumers who purchase travel from an Ontario travel agency (Correct answer)
- Ontario consumers who purchase travel from any travel agency in Canada
- Ontario consumers who travel exclusively in Ontario
- Manitoba consumers who purchase from a local agency that has a branch agency in Ontario
Correct answer: Manitoba consumers who purchase travel from an Ontario travel agency
The Travel Industry Compensation Fund is designed to protect Ontario consumers who suffer financial loss due to the failure of a registered Ontario travel agency—but it also extends to Manitoba consumers who purchase travel from an Ontario-registered travel agency. This is because the Ontario agency is subject to TICO regulation regardless of where the consumer lives. Manitoba consumers buying from a local Manitoba-only agency would not be covered, and the fund does not cover all Canadian agencies.
Question 2: According to the Travel Industry Act, 2002, a travel agent does NOT have to inform a client before booking
- the total price of the travel services, including all taxes and service charges
- that some days can be cloudy, even in a sun destination (Correct answer)
- that conditions at the destination may be different from those in Canada
- that a counselling fee is applied by the agent
Correct answer: that some days can be cloudy, even in a sun destination
Under the Travel Industry Act, 2002, travel agents are required to disclose material information such as total pricing, destination conditions, and fees—but they are not required to disclose general, subjective, or unpredictable weather information like 'some days can be cloudy.' Cloudy weather is common knowledge and not a specific material risk that legally requires disclosure. The other three options are all mandatory disclosures under the Act.
Question 3: A client buys a vacation package from ABC Tours on May 1. The departure date is June 15. ABC Tours pays the travel wholesaler on May 8. On which date must the travel wholesaler produce the tickets, vouchers, itinerary, and other related documents for the travel agent?
- May 22 (14 days after payment is received)
- June 8 (7 days before departure)
- May 24 (21 days before departure)
- June 1 (14 days before departure) (Correct answer)
Correct answer: June 1 (14 days before departure)
TICO regulations require a travel wholesaler to provide tickets, vouchers, itineraries, and related documents to the travel agent no later than 14 days before the client's departure date. Since departure is June 15, the documents must be provided by June 1. The other options incorrectly calculate the deadline based on payment date or use incorrect time intervals.
Question 4: The amount of working capital required by a travel agency is based on which of the following?
- the agency's sales in Ontario during the previous fiscal year (Correct answer)
- the number of bookings the agency made during the previous fiscal year
- the length of time the agency has been in business
- the number of employees the agency has
Correct answer: the agency's sales in Ontario during the previous fiscal year
Under TICO's regulatory framework, the required working capital for a travel agency is calculated based on the agency's total sales in Ontario during the previous fiscal year. This ensures the agency maintains sufficient financial reserves proportional to its sales volume to protect consumers. The number of bookings, years in business, or employee count are not the basis for this calculation.
Question 5: Which of the following statements is NOT TRUE, when it comes to describing TICO's role in attempting to resolve disputes between consumers and registrants?
- TICO will hear complaints between a consumer and an unregistered travel agent.
- TICO staff will review the complaint against the requirements of the Act and Regulation to determine if the registrant met their obligations.
- A complainant must fill out a complaint form and include information and supporting documents.
- TICO has the authority to impose a settlement in a dispute. (Correct answer)
Correct answer: TICO has the authority to impose a settlement in a dispute.
TICO acts as a mediator and regulator—it investigates complaints and determines whether a registrant met their obligations, but it does not have the authority to impose a binding settlement on either party. The other statements are true: TICO will hear complaints against unregistered agents, staff review complaints against the Act's requirements, and complainants must submit a form with supporting documents.
Question 6: A TICO investigator arrives at ABC Travel Agency and sees someone inside taking files from the cabinets and burning them in a pail. The investigator enters the agency and searches the premises, without a search warrant. Is the investigator allowed to do this?
- no, the investigator cannot enter the premises without the warrant
- yes, as long as it is between 6:00 a.m. and 9:00 p.m.
- no, the investigator can enter only if accompanied by the police
- yes, exigent circumstances permit the investigator to enter and search the premises (Correct answer)
Correct answer: yes, exigent circumstances permit the investigator to enter and search the premises
Exigent circumstances allow investigators or law enforcement to enter and search premises without a warrant when evidence is actively being destroyed, as was the case here with files being burned. Waiting to obtain a warrant would result in the permanent loss of evidence, justifying the immediate warrantless entry. The time-of-day restriction and police accompaniment requirements do not override the exigent circumstances exception.
Question 7: Which one of the following circumstances would NOT result in the travel agent having to offer the client a full refund or comparable alternative travel services?
- where the scheduled departure of any transportation is delayed or advanced by 12 hours or less (Correct answer)
- where the contract does not permit a price increase and the total price of the travel services is increased, whatever the amount or reason
- where a contract permits a price increase, the cumulative increase is more than 7% of the total price (excluding increases caused by an increase in the PST, GST or HST)
- where a different cruise ship has been substituted
Correct answer: where the scheduled departure of any transportation is delayed or advanced by 12 hours or less
A delay or advancement of 12 hours or less is not considered a 'material change' under TICO regulations, so no refund or alternative is required. Material changes that do trigger refund rights include: any price increase when the contract prohibits it, a cumulative price increase over 7% when the contract allows increases, and substitution of a different cruise ship — all of which meaningfully alter what the client originally agreed to purchase.
Question 8: ABC Travel Agency has been in business for two years. The owner informs TICO that he plans to stop maintaining a trust account. Under Ontario Regulation 26/05, can he do this?
- no, he must be in business for three fiscal years before he can choose not to operate a trust account
- yes, if he provides security in lieu of trust accounting (Correct answer)
- no, he must operate a trust account
- yes, as long as the general account contains the equivalent of sales from the past 12 months he can close the business' trust account
Correct answer: yes, if he provides security in lieu of trust accounting
Ontario Regulation 26/05 does not require all registrants to maintain a trust account — it permits an alternative where the registrant provides adequate security in lieu of trust accounting. The regulation does not impose a minimum number of years in business before this option becomes available, and there is no provision allowing a plain general account balance to substitute for a trust account.
Question 9: ABC agency has been in business for six months. The advertising bill must be paid. Can ABC take money from the company trust account to pay the bill?
- yes, because the trust account can be used for operating expenses such as advertising
- no, because only the general account can be used for operating expenses (Correct answer)
- no, because ABC does not have to maintain a trust account after being in business for six months
- yes, but only after money is transferred from the general account to the trust account
Correct answer: no, because only the general account can be used for operating expenses
Trust accounts under TICO regulations exist solely to hold client funds (such as deposits for travel services), and those funds cannot be used for the agency's own operating expenses like advertising bills. Operating expenses must be paid from the agency's general account. An agency only six months old is still required to maintain a trust account, and transferring money from the general account into the trust account would not change this restriction.
Question 10: Joe and Sally are originally from Sudbury, but now live in Windsor. They depart from Toronto for a round-trip vacation package to Europe. When the supplier declares bankruptcy, Joe and Sally are stranded overseas. Under the trip completion provision in Ontario Regulation 26/05, where can Joe and Sally be returned, assuming that costs for each destination are approximately the same?
- Sudbury
- Windsor
- Toronto
- Toronto or Windsor (Correct answer)
Correct answer: Toronto or Windsor
Under Ontario Regulation 26/05's trip completion provision, stranded consumers can be returned to either their departure point or their current place of residence. Joe and Sally departed from Toronto and reside in Windsor, so both are valid return destinations. Sudbury is where they originally grew up but is no longer their residence, so it does not qualify. The options listing only Toronto or only Windsor are each partially correct but incomplete — the regulation allows either.
Question 11: If a person has defaulted on paying a fine for an offence, TICO can do which of the following?
- ban the person from ever working in a travel agency again
- impose an additional fine of $25,000 and a sentence of up to two years in jail
- place a lien on real estate or personal property of the person in default (Correct answer)
- borrow the money from the Travel Industry Compensation Fund until the person pays
Correct answer: place a lien on real estate or personal property of the person in default
When a person defaults on paying a fine, TICO has the authority to place a lien on the person's real estate or personal property to secure payment of the outstanding amount. TICO cannot permanently ban someone from the industry solely for a fine default, impose additional criminal penalties like jail time, or draw funds from the Travel Industry Compensation Fund (which exists to compensate consumers, not cover enforcement costs).
Free TICO Destination Knowledge Questions and Answers 1
The Travel Industry Compensation Fund applies to