Ontario Regulation 26/05 Flashcards

A travel agent receives full payment from a consumer for a 10-day European tour departing in four months. The agent remits the entire payment to the wholesale supplier the same week. The supplier subsequently confirms the booking. Under Ontario Regulation 26/05, when may the travel agent withdraw its earned commission from the trust account?

Answer: After the consumer has actually received the travel services (i.e., after travel is completed)

Under O. Reg. 26/05, commission held in trust may only be withdrawn after the travel services have actually been provided to the consumer. Paying the supplier in advance and receiving booking confirmation does not trigger entitlement to withdraw commission. The trust obligation runs until the consumer has received the services — not until the supplier is paid or the booking is confirmed.

A registered Ontario travel agent arranges a cruise package for a consumer and collects $9,200 in trust. Before the sailing date, the cruise line becomes insolvent and cancels all voyages. The travel agent has already remitted the full $9,200 to the cruise line and holds nothing in trust. The consumer files a claim with the TICO Consumer Protection Fund. Which statement best reflects the Fund's applicable limit under O. Reg. 26/05 in this scenario?

Answer: The consumer may recover up to $5,000 per travel service contract from the Fund

The TICO Consumer Protection Fund, established under the Travel Industry Act, 2002 and governed by O. Reg. 26/05, covers consumer losses arising from the insolvency of a registrant OR a supplier that a registrant booked on the consumer's behalf. The maximum payable per travel service contract is $5,000. The consumer cannot recover the full $9,200 through the Fund alone; the per-contract cap applies regardless of the actual loss amount.

Under Ontario Regulation 26/05, which of the following situations would allow a registrant to lawfully withdraw funds from its trust account WITHOUT first providing travel services or issuing a refund?

Answer: The registrant is remitting the funds directly to a registered supplier in accordance with the supplier's payment schedule

O. Reg. 26/05 specifies that trust money may be withdrawn to remit to a supplier, to refund the consumer, or to take earned commission after travel services are provided. Remitting funds to a supplier on behalf of the consumer is an explicitly permitted withdrawal reason. A consumer waiver, verbal consent, or file transfer to another agent does not create an independent right to remove trust funds — the regulation's permitted withdrawal reasons are exhaustive.

A travel agent's TICO registration is revoked following a disciplinary hearing. Under Ontario Regulation 26/05, what is the registrant's obligation regarding consumer transaction records after the revocation takes effect?

Answer: Records must be retained by the former registrant for a minimum of seven years from the date each transaction was completed

O. Reg. 26/05 requires registrants — and former registrants — to retain transaction records for seven years from the date of each transaction. The obligation does not terminate upon revocation, expiry, or cancellation of registration. A former registrant who destroys records before the seven-year window closes is in breach of the regulation and may face additional liability.

A travel agent operating in Ontario places a digital advertisement for a last-minute all-inclusive resort package. The ad displays the resort name, destination, travel dates, and the total price per person including taxes. Under Ontario Regulation 26/05, what additional element is MANDATORY for this advertisement to comply?

Answer: The registrant's TICO registration number

O. Reg. 26/05 requires every advertisement by a registrant to display the registrant's TICO registration number. This requirement applies to all advertising media, including digital. While TICO branding and fund disclosures are encouraged best practices, the regulation mandates the registration number specifically. The supplier's registration number and a fund statement are not required elements of a consumer-facing advertisement.

A sole-proprietor travel agent in Ontario is applying to renew her TICO registration. Her gross revenue from travel sales in the prior fiscal year was $820,000. Under Ontario Regulation 26/05, which security amount is she required to maintain at the time of renewal?

Answer: An amount scaled to her gross revenue, because revenues exceeding $500,000 trigger the enhanced security tier

O. Reg. 26/05 ties required security to the registrant's gross revenue from travel sales. Registrants whose revenue exceeds defined thresholds must post proportionally higher security to protect consumers. A sole proprietor with $820,000 in gross travel revenue falls into the enhanced tier, not the base flat-rate tier that applies to lower-volume or new registrants. The specific dollar amounts are set by schedule in the regulation and increase with revenue bands — the key principle is that high-volume registrants bear higher security obligations.