"Redress Mechanisms
- Trade & Professional Related Complaints
Resolution Mechanisms"
by
Mr. Joseph Tung,
Executive Director, 
the Travel Industry Council of Hong Kong

Ladies and Gentlemen,

        I'm very honoured to be here to discuss with you the complaint handling mechanism in place at the Travel Industry Council of Hong Kong, or TIC for short, which helps travellers to settle disputes between travel agents and their customers.

        Before I go on to introduce our complaint handling mechanism, perhaps I should first give you a brief summary as to what the TIC is and how it functions to protect consumers.

        The TIC was established in 1978 as a joint council of several travel associations. Later in 1985, the Government enacted the Travel Agents Ordinance and made it mandatory for all outbound travel agents to be licensed. However, even after the enactment of the Ordinance, there were still a large number of cases which involved travel agents running away with their customers’ money or going bankrupt suddenly. During all those unpleasant cases, the TIC worked very hard to help travellers and gradually won wide recognition in the eyes of the public and the Government as well.

        Then in 1988 when the Travel Agents Ordinance was amended, TIC membership became a prerequisite for obtaining the Travel Agent's Licence, which is a legal requirement for any companies wishing to carry on outbound travel business. Since then, the TIC has become a self-regulatory industry association, working with the Government's Travel Agents Registry to regulate the outbound industry.

        Generally speaking, consumers can have four options, or stages, if they are not satisfied with the product or service they have bought in a shop. First, they can go to the shop where they buy the product or service and complain directly to the people there. Second, they can lodge a complaint with the industry association, which supposedly has duties to monitor its member shops. The TIC is one such industry association. Third, the consumer may go to some statutory organisations, such as the Consumer Council, to seek redress. As a last resort, consumers may of course take legal action against the shop. Each of these four options has its own merits and demerits, and therefore the consumer has to decide which one of them is to be used.

        In the following, I would like to briefly explain how the TIC seeks to help travellers. When we receive a complaint lodged by a traveller, our Consumer Relations Department will ask the complainant to put down the case in black and white and send us supporting documents and evidence. We will then contact the travel agent concerned to hear the other side of the story. If there are any discrepancies between what the complainant claims and what the agent argues, we will investigate by ourselves. We may seek information from the airline, we may ask overseas tourism bureaus for advice and assistance, we may also contact other industry members, such as hotels, rental car companies and the like. But more importantly, our trained staff will use their professional knowledge to try to reach an informed judgement about the case. After obtaining a formal reply from the agent, we will tell the complainant what the reply is and advise him as to the situation of the case. For instance, a traveller may ask for a compensation of HK$1,000 because of dissatisfaction with the package tour he has joined. But the travel agent may be willing to offer HK$500 only. We will then consider whether the offer is fair by assessing a number of factors such as the loss suffered by the traveller and the actual costs of the tour. If we believe the offer is a good one for the traveller, we will advise him to accept it; but if he doesn't, he may require that the case should be referred to the Consumer Relations Committee for a hearing.

        The Consumer Relations Committee has six trade members and six non-trade members, in addition to the Convenor of the Committee, who is a TIC Board director. The quorum of every meeting is five – one is the Convenor and two is trade members and two must be non-trade members. At present, the Committee meets at least once a month to speed up the complaint-settling procedures. Whereas it is vital to have non-trade members sitting on the Committee to ensure impartiality, it is also important to have trade members so that Committee meetings can be benefited from a full understanding of industry practices and regulations. Rulings reached by the Committee are all binding on our member agents, who could lodge an appeal to the Board of Directors if they were not satisfied with the rulings. Their appeal will then be heard by the Board and any decision made at this stage is final and subject to no more appeal. If, however, the complainant is not happy with the Committee's rulings, he may have to pursue the case through other means, such as legal action.

        The role of the TIC is not to arbitrate a case, partly because we don't have the resources and partly because this may be very time-consuming. Nor do we just mediate between the consumer and the travel agent in question, because we do have authority and duties to make our member agents comply with our rules and regulations. The way we handle complaints is something between arbitration and mediation. Since any travel agents wishing to do outbound business must first become our members before licences will be granted to them by the Government, we are an industry association which has real power to monitor our member agents. If an agent's membership was terminated, it could no longer do any business. That's why we have been so successful in monitoring the practice of our members because we have a strong legal backup.

        The importance of having such a legal backup has become more evident than ever when complaints against inbound travel agents have been on the rise recently. Under the existing ordinance, inbound agents do not need to apply for any licences and are therefore subject to the regulation of virtually no organisation. In such circumstances, we are not as effective and efficient as we would like ourselves to be in handling cases concerning non-TIC members. However, we still manage to take some indirect approach to solve the problem by cooperating with tourism authorities in Mainland China or other countries. In some cases, we have lobbied overseas tourism authorities to recommend their travel agents to deal with TIC-members in order to have a high standard of service quality and greater protection for their travellers. In this way, we hope to push all non-TIC members into join the TIC because there will be many opportunities awaiting them. Once they become our members, they will have to play by the rules. Such a method is of course not effective and is rather tortuous. But that is all we can do in the current situation.

        I do hope that the Government will be more active in setting up some form of legislative framework for the inbound industry so that inbound travel agents can be more properly regulated and consumers can be better protected. From our experience, it is very clear that without strong governmental support, it would be extremely difficult to regulate any industry and redress consumer grievances.

        Thank you for inviting me to speak today.