The Travel Agent Arbiter (TAA) in the dispute between a travel agent and the Airlines Reporting Corp. (ARC) regarding the unauthorized withdrawal of funds through Payment Express announced his decision that the TAA "lacks the authority to hear such a dispute" and therefore could not "docket a complaint nor proceed further in this matter." The case was dismissed "without prejudice," meaning that no decision was rendered on the merits of the dispute.
In response, ASTA issued the following statement:
"ASTA respectfully and fundamentally disagrees with the Travel Agent Arbiter's analysis and the reasoning behind this judgment. The outcome places all travel agents in the position of having no expert remedy available for what we believe to be an abuse of the relationship between travel agents and ARC. Therefore, we are examining other venues in which these issues can be resolved.
From our perspective there are really two issues at play. First, is the matter of ARC's authority to withdraw funds on behalf of individual airlines under "unilaterally imposed" contacts from the agent's ARC account which was created for another purpose. This is an important legal and practical problem for potentially every travel agency, particularly since ARC gave agents only five days to respond to the airline with proof that the claims were invalid.
The second is the question of whether an airline can form a binding contract with a travel agent by simply filing an undated policy without additional notice on a Web site or in a GDS. It is crucial to maintenance of a mutually beneficial business relationship that one party not be able to impose contractual terms on the other without communicating the terms clearly and completely. In our view that is what happened here and this, too, is a potential problem for every travel agency.
Absent a reaction from ARC or the airlines indicating their plans to discontinue these practices, we will continue to pursue a legal remedy.
ASTA had supported the complaint of the travel agent against ARC with the Travel Agent Arbiter challenging ARC's plan to withdraw funds from the agent's ARC checking account at United Airline's request. In an unprecedented move, ARC sent the agent invoices using ARC Payment Express to collect payment for alleged carrier policy violations that historically would have been processed as regular debit memos in a one-to-one relation with the agent.
ARC Payment Express was created by ARC in 2006 as an easy way to collect booking fees for agents who elected not to opt-in to the GDS's new full content programs.
It remains ASTA's belief that the Agent Reporting Agreement (ARA) does not give ARC the authority to draft an agent's ARC checking account as provided for by Payment Express and that such authority cannot be conferred on ARC by what amounts to an uncommunicated adhesion contract by one airline."
Theodore Koumelis - Thursday, April 10, 2008