TICO Travel Compensation Fund 2 — Questions and Answers
Question 1: Which of the following consumers would be eligible to make a claim to the Travel Compensation Fund (TCF)?
- An Ontario resident who paid a TICO-registered travel agent for a package and the agent became insolvent before travel (Correct answer)
- A Quebec resident who booked directly on an unregistered online travel website and lost money
- An Ontario resident who booked directly with an unregistered online travel website and lost money
- A travel agent who lost their commission income because a supplier went bankrupt
Correct answer: An Ontario resident who paid a TICO-registered travel agent for a package and the agent became insolvent before travel
The TCF is available to consumers who suffer losses when a TICO-registered travel agent or wholesaler becomes insolvent.
The Travel Compensation Fund is available to consumers who purchased travel services through a TICO-registered agent or wholesaler and suffered a financial loss due to the registrant's insolvency. Bookings made through non-registered agencies or directly with foreign suppliers are not covered by the TCF. Travel agents cannot claim the TCF for lost commissions.
Question 2: The Travel Compensation Fund (TCF) is funded primarily through:
- Annual levies paid by all TICO-registered travel agents and wholesalers based on their sales volume (Correct answer)
- A direct grant from the Ontario government's general revenue fund
- A federal consumer protection tax levied on all Canadian travel purchases
- Voluntary contributions from travel industry associations
Correct answer: Annual levies paid by all TICO-registered travel agents and wholesalers based on their sales volume
The TCF is funded by annual levies paid by TICO registrants, calculated based on their Ontario travel sales.
The Travel Compensation Fund is maintained through annual levies assessed on all TICO-registered travel agents and wholesalers. The levy is typically calculated as a percentage of each registrant's Ontario travel sales. This funding model places the cost of consumer protection on the industry participants who benefit from the TICO registration system.
Question 3: The Travel Compensation Fund (TCF) covers losses arising from which specific event?
- The financial insolvency of a TICO-registered travel agent or travel wholesaler (Correct answer)
- A travel supplier (e.g., airline or hotel) going bankrupt, even if the agent is solvent
- Travel disruptions caused by natural disasters or political instability
- Injuries or medical emergencies experienced during travel
Correct answer: The financial insolvency of a TICO-registered travel agent or travel wholesaler
The TCF specifically covers losses arising from the financial insolvency of a TICO-registered travel agent or wholesaler — not supplier bankruptcies or travel disruptions.
The Travel Compensation Fund is specifically designed to address one particular risk: the insolvency of a TICO-registered travel agent or wholesaler. The TCF does not cover losses due to airline or hotel bankruptcies, travel disruptions due to weather or political events, or travel-related injuries or medical expenses.
Question 4: Before filing a claim with the Travel Compensation Fund, what must a consumer do first?
- Attempt to obtain a refund through all other available means, including credit card chargebacks and travel insurance claims (Correct answer)
- File a formal lawsuit against the insolvent travel agency
- Wait 12 months from the date of the insolvency before filing a claim
- Obtain written confirmation from TICO that the registrant is insolvent
Correct answer: Attempt to obtain a refund through all other available means, including credit card chargebacks and travel insurance claims
The TCF is a last-resort fund. Consumers must first pursue all other available remedies such as credit card chargebacks and travel insurance before the TCF will consider their claim.
The Travel Compensation Fund operates as a last resort for consumers who have suffered losses due to a registrant's insolvency. Before a TCF claim will be considered, consumers must demonstrate that they have pursued all other available remedies, including credit card chargebacks and travel insurance claims. The TCF compensates only the residual unrecovered loss after all other remedies have been exhausted.
Question 5: A consumer paid a TICO-registered agency $8,000 for a family vacation package. The agency became insolvent. The consumer received $2,000 back through a credit card chargeback. How much can the consumer claim from the TCF?
- Up to $6,000 (the unrecovered portion), subject to the TCF's maximum claim limit (Correct answer)
- The full $8,000, regardless of the chargeback already received
- $8,000 minus any TCF administrative fee
- Nothing — the consumer must wait 2 years after insolvency before filing a TCF claim
Correct answer: Up to $6,000 (the unrecovered portion), subject to the TCF's maximum claim limit
The TCF covers the unrecovered portion of the consumer's loss — in this case, up to $6,000 — after credit card chargebacks are applied, subject to the TCF's maximum per-claim limit.
The TCF is a gap-filler, compensating for losses not recovered through other means. In this scenario, the consumer originally paid $8,000 and recovered $2,000 through a credit card chargeback, leaving a residual loss of $6,000. The consumer may claim up to $6,000 from the TCF, subject to the applicable per-claim maximum. The TCF will not pay amounts already recovered through other channels.
Question 6: What is the maximum amount the Travel Compensation Fund will pay to any single consumer claimant?
- The TCF has a published maximum claim limit per consumer, which is set by TICO's board and can change over time (Correct answer)
- There is no maximum — the TCF will pay 100% of all proven losses
- The maximum is $500 per transaction regardless of the amount lost
- The maximum is equal to the registrant's trust account balance divided by the number of claimants
Correct answer: The TCF has a published maximum claim limit per consumer, which is set by TICO's board and can change over time
The TCF has a published maximum claim limit per consumer that is set by TICO's board. Consumers should check TICO's current schedule for the applicable limit.
The Travel Compensation Fund has published maximum claim amounts per consumer claimant, which are set by TICO's board of directors and can be adjusted over time. Consumers whose losses exceed the maximum will only recover up to the cap. Consumers are encouraged to review TICO's current TCF schedule and to purchase travel insurance to cover any potential gap between their losses and the TCF maximum.
TICO Travel Compensation Fund 2
Which of the following consumers would be eligible to make a claim to the Travel Compensation Fund (TCF)?