TICO Ontario Regulation 26/05 3 — Questions and Answers
Question 1: Under Ontario Regulation 26/05, a travel agent who receives a client's payment must deposit it into the designated trust account within what timeframe?
- Two business days of receiving the payment (Correct answer)
- Thirty days of receiving the payment
- At the end of the business month in which payment was received
- Only after the supplier's invoice has been received
Correct answer: Two business days of receiving the payment
Ontario Regulation 26/05 requires client payments to be deposited into the designated trust account within two business days of receipt.
Ontario Regulation 26/05 specifies that client funds must be deposited into the designated trust account within two business days of receipt. This prompt deposit requirement ensures client funds are protected quickly and reduces the risk of commingling or misappropriation.
Question 2: Ontario Regulation 26/05 provides that a travel agent may withdraw funds from the designated trust account when which condition is met?
- When the funds are due and payable to a travel supplier, or when the agent has earned their commission after the supplier confirms receipt (Correct answer)
- At any time, provided the withdrawal is for legitimate business expenses
- Only after the client's travel has been completed
- Only with written approval from TICO's compliance department
Correct answer: When the funds are due and payable to a travel supplier, or when the agent has earned their commission after the supplier confirms receipt
Funds may be withdrawn from the trust account when they are due and payable to a supplier or when the agent has legitimately earned their commission portion.
Ontario Regulation 26/05 restricts trust account withdrawals to specific permissible purposes. Funds can be withdrawn to pay suppliers when the supplier's invoice is due and payable. Agents can also withdraw their earned commission component once the supplier has confirmed the booking and the commission is legitimately earned. Withdrawing trust funds for operating expenses or personal use is prohibited.
Question 3: Under Ontario Regulation 26/05, which of the following is required when a travel registrant receives a complaint from a consumer?
- The registrant must acknowledge the complaint, investigate it, and maintain a written record of the complaint and its resolution (Correct answer)
- The registrant need only respond to complaints submitted in writing by registered mail
- Complaints must be forwarded directly to TICO; the registrant takes no independent action
- Registrants must resolve all complaints within 48 hours or face automatic suspension
Correct answer: The registrant must acknowledge the complaint, investigate it, and maintain a written record of the complaint and its resolution
Registrants must acknowledge, investigate, document, and maintain records of all consumer complaints and their resolutions under Ontario Regulation 26/05.
Ontario Regulation 26/05 requires registrants to have a complaint-handling process that includes acknowledging the complaint, conducting an investigation, communicating the outcome to the consumer, and maintaining a written record of the complaint and its resolution. TICO may review complaint records during audits to assess how a registrant handles consumer concerns.
Question 4: Which of the following correctly describes the relationship between Ontario Regulation 26/05 and the Travel Industry Act, 2002?
- The Regulation provides detailed rules and requirements that give practical effect to the broader framework established by the Act (Correct answer)
- The Regulation replaces the Act and is the only legal instrument governing Ontario's travel industry
- The Regulation applies only to travel wholesalers; the Act alone governs travel agents
- The Regulation is a federal instrument that supplements Ontario's provincial Act
Correct answer: The Regulation provides detailed rules and requirements that give practical effect to the broader framework established by the Act
Ontario Regulation 26/05 is a subordinate instrument that provides detailed operational rules flowing from the authority granted by the Travel Industry Act, 2002.
The Travel Industry Act, 2002 establishes the broad framework for Ontario's travel industry regulation. Ontario Regulation 26/05 is a regulation made under the Act that fills in the detailed operational requirements: exact disclosure timelines, trust account rules, invoice requirements, advertising standards, and record-keeping obligations. Both instruments work together to create the complete regulatory framework.
Question 5: Under Ontario Regulation 26/05, which of the following best describes a consumer's protection regarding credit card refunds?
- Refunds for credit card payments should be processed back to the original credit card used for payment (Correct answer)
- The registrant may convert any refund to a travel credit regardless of the consumer's preference
- Credit card payments are not covered by the Regulation since chargeback rights are a federal banking matter
- Refunds for credit card payments must be made in cash if requested by the consumer
Correct answer: Refunds for credit card payments should be processed back to the original credit card used for payment
Under TICO's standards, refunds for credit card transactions should be credited back to the same credit card. Converting credit card refunds to travel credits without the consumer's agreement is not permitted.
TICO's standards and practices require that refunds be returned to the original form of payment where possible. For credit card transactions, this means the refund should be credited back to the same credit card. Unilaterally converting credit card refunds to travel credits without the consumer's agreement has been specifically identified by TICO as inconsistent with consumer protection obligations.
Question 6: Under Ontario Regulation 26/05, when is a registered travel agent required to disclose the details of a supplier's cancellation policy to the consumer?
- Before the consumer makes any payment, so the consumer understands the conditions before committing financially (Correct answer)
- Only at the time of final payment, not before the initial deposit
- Only if the consumer specifically requests the cancellation policy in writing
- After travel is completed, as part of the post-travel summary
Correct answer: Before the consumer makes any payment, so the consumer understands the conditions before committing financially
Cancellation policies are material terms that must be disclosed before any payment is accepted, including the initial deposit.
Ontario Regulation 26/05 requires that material terms and conditions — including cancellation and refund policies — be disclosed to consumers before any payment is accepted. This includes before the initial deposit is paid. Disclosing cancellation conditions only at the time of final payment, after the consumer has already made a financial commitment, does not fulfill the pre-payment disclosure obligation under the Regulation.
TICO Ontario Regulation 26/05 3
Under Ontario Regulation 26/05, a travel agent who receives a client's payment must deposit it into the designated trust account within what timeframe?