TICO Compliance and Enforcement 5 — Questions and Answers
Question 1: Under the Travel Industry Act, 2002, which of the following individuals is considered a 'registrant' subject to TICO's compliance and enforcement authority?
- A hotel concierge who books restaurant reservations for guests
- An airline customer service representative selling ticket upgrades
- An Ontario-based operator selling travel packages directly to consumers (Correct answer)
- A tourism board employee promoting destinations at trade shows
Correct answer: An Ontario-based operator selling travel packages directly to consumers
Under the Travel Industry Act, 2002, operators who sell travel services directly to consumers in Ontario must be registered with TICO and are subject to its enforcement authority.
Question 2: A TICO registrant self-discloses a compliance breach to TICO before it is discovered during an audit. How does TICO typically treat voluntary self-disclosure?
- Self-disclosure results in automatic registration revocation
- Voluntary disclosure may be considered a mitigating factor in determining penalties (Correct answer)
- Self-disclosure has no impact on the enforcement outcome
- TICO is required by law to impose maximum penalties regardless of disclosure
Correct answer: Voluntary disclosure may be considered a mitigating factor in determining penalties
Voluntary self-disclosure of compliance issues is generally viewed as a mitigating factor by TICO, potentially resulting in reduced penalties compared to violations discovered through audit.
Question 3: A travel agent continues selling travel services after their individual TICO registration has lapsed. Under the Travel Industry Act, 2002, this individual is:
- Permitted to continue operating for up to 30 days during the renewal period
- Acting illegally and subject to prosecution and fines (Correct answer)
- Required only to notify their employer within 10 business days
- Exempt from registration if supervised by a registered travel agent
Correct answer: Acting illegally and subject to prosecution and fines
Selling travel services without a valid TICO registration is illegal under the Travel Industry Act, 2002, and can result in prosecution and significant fines.
Question 4: TICO's compliance monitoring includes reviewing trust account records. Which of the following would be a RED FLAG in a trust account audit?
- Interest earned on trust funds deposited to a separate account
- Client funds being withdrawn before travel services are fully delivered and supplier invoices paid (Correct answer)
- Monthly reconciliation statements showing minor rounding differences
- Separate trust accounts maintained for different types of travel products
Correct answer: Client funds being withdrawn before travel services are fully delivered and supplier invoices paid
Withdrawing client funds from trust before services are delivered and suppliers are paid is a serious violation indicating possible misappropriation of trust funds.
Question 5: During a TICO compliance review, an inspector discovers that a travel agency is not providing written contracts to consumers for travel packages over $100. This is:
- Acceptable if consumers verbally agree to the terms
- A violation of TICO's mandatory disclosure requirements (Correct answer)
- Permitted for online bookings where electronic confirmation is sent
- Only required for international travel, not domestic packages
Correct answer: A violation of TICO's mandatory disclosure requirements
TICO's regulations require registrants to provide written contracts containing specific mandatory disclosure information for travel packages, regardless of how the booking is made.
Question 6: A travel agency's principal (owner) is convicted of fraud unrelated to the travel industry. What action can TICO take regarding the agency's registration?
- TICO has no authority over matters unrelated to travel industry operations
- TICO can consider the conviction as grounds to refuse renewal or revoke registration (Correct answer)
- TICO must wait for a related travel industry conviction before acting
- The agency retains full registration rights since the conviction was personal, not corporate
Correct answer: TICO can consider the conviction as grounds to refuse renewal or revoke registration
TICO can consider a principal's criminal convictions, including those unrelated to travel, when assessing the suitability of a registrant, as character and integrity are fundamental to registration.
Question 7: When TICO imposes conditions on a registrant's registration as part of an enforcement action, the registrant must:
- Accept the conditions only if they agree with TICO's findings
- Comply with all imposed conditions or risk further enforcement action including revocation (Correct answer)
- Negotiate alternate conditions within 60 days before any compliance is required
- Refer the conditions to their provincial MPP for review before complying
Correct answer: Comply with all imposed conditions or risk further enforcement action including revocation
Conditions imposed by TICO on a registration are legally binding and must be complied with; failure to do so can escalate enforcement to suspension or revocation.
TICO Compliance and Enforcement 5
Under the Travel Industry Act, 2002, which of the following individuals is considered a 'registrant' subject to TICO's compliance and enforcement authority?