NTA Drops Consumer Protection Plan

Bankruptcies spur huge restitution payments by association

By: Lisa Jennings

After seven bankruptcies in 2002 and the possibility of more this year, the National Tour Association Board of Directors announced plans to eliminate its Consumer Protection Plan as of Jan. 1, 2004.

As a result, member dues will be cut by 43 percent to $400 next year, officials said last week.

Last year the association saw a loss of $725,000 due to the Consumer Protection Plan, which has been in place since 1988.

NTA’s plan was funded by the association, not directly by members, and the restitution payments “created a hugely disproportionate cost for the association,” said Hank Phillips, CTP, NTA president.

“Could history repeat itself? It’s quite possible,” said Phillips. “It was the board’s view that something had to give.”

The board is scheduled to meet April 22-27 to discuss alternatives to the plan, though no new consumer restitution programs are expected to be proposed. Instead, the association is looking at educating members on voluntarily obtaining bonds or establishing trust accounts to protect consumers in the event of bankruptcy.

NTA has strongly opposed “seller of travel” legislation that has mandated such bonds, arguing against government intrusion.

NTA tour operators will still be required to maintain a $1 million in errors and omissions and professional liability insurance.

NTA also has a code of ethics, and consumers can file complaints through the association.

“We strongly believe that lowering the tour operator member dues will offset these changes and will help tour operator members in these challenging times,” said Phillips.