How Canadian Travel Agency Owners Can Protect Themselves from Fraud

Travel advisors work hard to build their businesses—but a simple mistake mixed with a bad actor can bring down even a thriving agency.

Dorian Werda, registrar and chief operating officer for the Travel Industry Council of Ontario (TICO), appeared at Travel Market Place Toronto to share tips on how advisors, supervisors, and agency owners can protect themselves from falling victim to industry fraud, such as credit card misuse or spoofed listings. 

TICO is a regulatory body that governs travel sales in Ontario. Travel retailers and travel wholesalers are required by law to be registered with the not-for-profit corporation, which administers and enforces the Travel Industry Act, 2002 on behalf of the provincial government. 

Travel agency owners and independent contractors selling travel services in Ontario need to comply with TICO requirements in order to legally operate as a business. Failing to do so can result in financial penalties, business suspension, and even business termination.  

Why travel agency owners need to safeguard their businesses

TICO governs the travel agency as a consumer protection body, enforcing industry rules, collecting fees, making rulings, and administering the Travel Compensation Fund. Generally speaking, TICO exists to protect Canadian consumers more than it exists to protect travel businesses. 

Employees and sub-contractors are considered the responsibility of the business; therefore, it’s important agency owners take measures to safeguard their business from liability. This includes criminal convictions. One bad actor committing fraud (i.e. misusing credit cards or pocketing money meant for suppliers) can take down an entire agency if there are no checks and balances in place.   

As an agency owner, you must demonstrate reasonable care was taken to protect consumers or risk being convicted alongside the person who committed the fraud. With the right preventative measures, however, you can avoid this situation altogether.     

Do background checks on all new hires

One of the most important ways agency owners can protect themselves from liability is to do thorough background checks on all new advisors.

Make sure you know who you are trusting with your business. Always ask for references, and make sure to contact them. Google search the applicant’s name—you could even do a reverse image search of their social media profile pictures to check for aliases. Do your due diligence to make sure the applicant is who they say they are. 

In addition to checking references and verifying a new hire’s identity, it’s a good idea to also run a credit check as well as a criminal record background check with the Canadian Police Information Centre (CPIC). Furthermore, TICO’s website lists previous charges and convictions, as well as registrant revocations and suspensions. Cross-reference this information with the new hire’s resume, looking for red flags.  

While this advice might seem obvious, Werda has seen the devastating consequences when this step was either skipped or not conducted thoroughly. In one case study, a relatively new agency owner had to terminate his business following hiring an advisor with a criminal record and previous rulings against them from TICO. 

Conduct a risk assessment of your business

Ultimately, senior management is responsible for protecting their business from fraud liability. Werda recommended agency owners take an active role in identifying vulnerabilities and creating systems to build in checks and balances.

There should be a system in place to track information like financial transactions, payment schedules, and other pertinent information. The more transparency there is between the advisor(s) and supervisor, the less opportunity there is for fraudulent activity. This also creates a safety net in case of an emergency; if an advisor is suddenly unable to continue serving clients, there needs to be records so someone else can easily take over.      

Senior management needs to be aware of everything happening within the business. For example, agency owners should monitor complaints. While your employees may be the ones actually receiving and resolving these issues, there should be a policy in place to keep senior management informed—that way, you are in a much better position to spot warning signs, like customers complaining about unusual credit card charges or money transfers requested from an advisor’s personal email address.

Avoid risky bookings

Group bookings can be great for overall sales, but they require a lot of work. While it might be tempting to take some shortcuts when planning for group travel, Werda warned against doing so in potentially risky situations. 

Advisors should always be communicating with the entire group whenever possible. If you opt to work with an individual who is acting as a liaison between you and the customers, you are trusting this person with your business. Ask yourself: Has this person earned that trust? Do you really know with whom you’re dealing with?

Be careful of situations where an unregistered individual is conducting activities that the Ontario government considers travel retail services, such as collecting money from customers or advertising a trip on social media. Although this person is not your employee, by working with them, your registered business is taking on that responsibility and will be held liable for customer reimbursement if TICO rules against him or her. 

TICO certification is not the same as being a TICO registration

At TMP Toronto, it was clear there was some confusion in the room regarding TICO certification and registration.

By law, all travel retailers operating in Ontario need to have a business registered with TICO. TICO also offers a certification program for people who want to sell travel services in Ontario. Crucially, passing this exam alone does not make someone TICO compliant. Their business needs to also be registered with the organization. 

If you are working with someone who is TICO certified, but they don’t have a business  registered with TICO, then by law you are responsible for their activities because they are operating under your registered travel business, even if they are not employed by you. 

According to the TICO website:
“Successfully passing the TICO Education Standards Exam allows you to sell travel services or provide travel advice to the public on behalf of a TICO registered Ontario travel agency. It does not mean that you are licensed to sell travel services in Ontario. A pass certificate for the exam is not the same as a TICO registration. If you are not working for a TICO registered travel agency and you wish to sell travel services in Ontario, you need to contact TICO’s registration department to obtain registration before you can start selling travel services.”

The best way to protect yourself is to think critically about whom you are conducting business with and if you are participating in risky situations.