Helloworld Travel agent goes bust, leaving would-be travellers out of pocket

Melbourne’s Geoff Berlowitz isn’t big on vacation.

Important points:

• Another Helloworld Travel franchisee has gone bankrupt in a suburb of Melbourne
• The collapse of the Mill Park outlet left 56 customers out of their pockets
• Consumers say Helloworld headquarters declined to help them

“I mean, Coburg would be a big trip for me,” he said with a crooked smile, referring to the suburb just down the street.

When he and his wife Margaret paid $ 22,500 in 2019 for a tour of Canada and Alaska scheduled for May 2020, it was a big deal.

“We spared no expense. We thought, crap, let’s just spend it and have a good time,” he said.

Then came the coronavirus pandemic in March 2020, their trip was canceled and they waited for their travel agent – Helloworld Travel Plenty Valley – to get a refund or credit from the tour operator.

“Every month it was apology after apology… but the main thing he said was that he was waiting for Evergreen [the tour operator] return the money, “said Margaret.

However, Evergreen later told the family that the travel agent only paid them bail at one time.

The Helloworld franchisee lost $ 21,500 of his money as the Mill Park business slowly went down.

In July of that year, it went into liquidation, which the Berlowitzs and 55 other customers combined owed $ 340,000, according to Administrator Mackay Goodwin.

Helen Harrison also owes $ 7,000 from the travel agent.

The Harrison family – Charlotte, David, Helen and Elise – said the money returned to Helloworld was not returned to them. (

ABC News: Daniel Fermer

)

She had booked airline tickets for her family to travel to the United States in March of last year – one last family vacation before her daughters finished high school.

After canceling the trip, she was repeatedly told by the business that the airline did not issue refunds and that she would need to take a credit.

“So we thought, well, that’s better than nothing,” she said.

After the store went into liquidation, she was told by the airline that she had refunded her money in April this year.

Helloworld Travel Plenty Valley held on to it before it went down three months later.

“Realizing that someone actually got your money back and then didn’t bother to let you know when you hunted it for 12 months is just terrible,” said Ms. Harrison.

“$ 7,000 is a lot of money to lose … we saved a few years for it,” she said.

Helloworld Travel Plenty Valley went bankrupt in 2020, owing numerous customers $ 340,000 for vacations they couldn’t take due to the pandemic. (

ABC News: Daniel Fermer

)

The Plenty Valley store was the last of at least four Helloworld travel agencies to go bust in Melbourne’s north and east.

In February, Helloworld Travel Monbulk and Bentleigh went into liquidation and owed 53 customers $ 68,000, while Helloworld Belgrave went under in September 2020.

Franchisor Helloworld Travel has 2,224 stores across Australia and is worth $ 280 million.

“They were practically like, ‘This is not our problem. It’s a franchise,'” she said.

The Berlowitzs say the only reason they booked with Helloworld rather than an independent agent was because they assumed they were dealing with a large company and their money would be safe.

“We assumed Helloworld was a single company under one name,” Margaret said.

Helen has also asked headquarters to return her money, to no avail.

“It’s just not good enough,” she said.

Helloworld Travel declined to answer questions about this issue.

Last week, which was 18 months of horror for the travel industry, it posted an unaudited annual loss of $ 35.9 million.

calls for better regulation of travel agencies

Consumer advocate Adam Glezer said the situation shows the need for better regulation of all travel agents, including the use of escrow accounts for customer funds.

“Lawyers need them, real estate agents need them,” he said.

“Why aren’t they required by travel agents?”

The state-run Travel Compensation Fund (TCF) was previously used to protect consumers in the event that a travel agency went bankrupt, but was abolished in 2014.

Agencies are now self-regulated by the Australian Federation of Travel Agents (AFTA), which also represents Helloworld Travel.

In a statement, AFTA said tighter regulation of travel agents was not needed and its agents were working tirelessly to ensure refunds and credits for those unable to travel due to COVID-19.

Travel agents that are members of the International Air Transport Association (IATA) must hold an escrow account from that organization for the purchase of airline tickets.

“In addition, travel agencies should already have an escrow or customer account [for other transactions]“, It says in the statement.

“Consumer and criminal law applies to all authorities as well as to the general public, and while no specific comments are made on each case, remedies for violations, including fraud, are already in place.”

None of the Helloworld franchisees will face criminal or civil charges, and the ABC makes no suggestion that they have engaged in any criminal activity.

Mr Glezer, who runs Facebook pages for would-be travelers who have been let down during the pandemic, believes that more needs to be done to prevent travel agents from spending customer funds on expenses other than holidays booked by customers .

“What we have to do is actually solve the problem that lies ahead of us to make sure that doesn’t happen in the future,” he said.

In June Liberal MP Kevin Andrews tabled a motion for better regulation in the industry in the federal parliament, backed by Labor MP Michael Freelander.

The topic has since stalled.

But for the Berlowitzs and the Harrisons, the fight with Helloworld Travel continues.

“I’m not going to let this go,” said Ms. Harrison.

“Just wiping your hands off it is unacceptable.”

Geoff Berkowitz had such a bad taste in the experience that he said he probably wouldn’t travel overseas anymore.

“I’d rather spend money on something else,” he said.