Compliance case study: what’s in a (trade) name?

The situation:

Samuel was looking to book a family vacation, and while researching different options online, stumbled upon a website for Mary’s Marvelous Vacations. The packages listed on Mary’s website were exactly what Samuel was looking for.

Being a savvy consumer, Samuel knew to look for a TICO registration number on Mary’s website. Unable to find the number, he checked the online directory on TICO’s website and still couldn’t find any record of Mary’s Marvelous Vacations.

Samuel contacted TICO to ask whether Mary’s Marvelous Vacations was a registered travel agency in Ontario. The ‘contact us’ section of Mary’s website said the company was based in London, Ontario.

What happened next:

Much like Samuel’s initial search, the call to TICO came up empty-handed. TICO did not have any record of a Mary’s Marvelous Vacations being registered in Ontario.

One of TICO’s compliance officers was tasked with getting more information to see if Mary was operating unregistered. In addition to the website, TICO also uncovered Facebook and Instagram pages branded as Mary’s Marvelous Vacations advertising travel deals.

A phone call to Mary determined that she is actually a TICO-certified travel agent who works at the London Travel Company, a TICO-registered travel agency. She uses the Mary’s Marvelous Vacations name and website to drum up additional business for herself at the travel agency.

What’s the issue?

When TICO got in touch with Franco, the owner of the London Travel Company, he confirmed that Mary is a long-time employee of the company. However, he had no knowledge that Mary was branding herself and operating Mary’s Marvelous Vacations as a separate website and form of advertising.

Agency owners are responsible for their employees:

As a TICO-certified travel agent, Mary is entitled to provide travel advice and sell travel, but only when it’s on behalf of a TICO-registered travel agency. The TICO certification does not give her the ability to go out on her own and begin offering travel advice or selling travel.

And, each travel agency owner/director, during both the initial registration process and with each subsequent renewal, signs an attestation agreeing to take responsibility for all travel agents working at their agency. This also includes outside sales representatives. Ultimately, agency owners are liable for the conduct of their employees, even if they don’t know about it.

Where are the money and bookings going?

In this case, any inquiries Mary received through Mary’s Marvelous Vacations were filtered to her job at the London Travel Company. Any sales went through the London Travel Company’s reservation system, money was deposited in the trust account and invoices were properly provided.

At TICO, we have seen other situations where travel agents have created their own trade names and sales were not conducted through the agency. Travel agents were collecting payments through personal e-transfers and the agency did not have proper records, as they had no knowledge of the booking transactions. This is a serious liability for the agency owner and a contravention of the law.

In the most serious cases where there was fraud involved by the individual travel agent, TICO has seen agencies cease operations because they couldn’t cover the debt incurred by the individual agent.

Registering a trade name:

To continue running Mary’s Marvelous Vacations, Franco would need to add that ‘trade name’ to the London Travel Company’s TICO registration. Click here for more information on registering a trade name.

Tips for travel agents:

If you want to create your own website or other form of marketing, it must be done with the permission of the agency owner or director. This includes registering the trade name with Service Ontario and adding the trade name to the agency’s TICO registration.

And, it’s important to remember that anytime you are holding yourself out as a travel agent, whether it’s through a website, social media accounts or other advertising, you must meet the legal advertising requirements. Click here to view TICO’s advertising checklist.

Tips for agency owners/directors:

As a travel agency owner, you’re responsible for the conduct of all travel agents employed or contracted by you, including outside sales representatives. Consider these three tips:

1. Have checks and balances in place if you permit the use of trade names by travel agents who are employed by you. Accountability starts with the tone from the top, so be sure there are clear policies and procedures in place around the use of trade names and that your travel agents know what is expected of them.

2. Know where the money is going – any sales must flow through the travel agency and not the travel agent individually.

3. The legal advertising requirements apply to all forms of media – the same requirements apply regardless of whether you are sharing information/advertising on a website, in print or on social media. Be sure that any representations using trade names meet the guidelines.

Trade names are a popular marketing tool in the travel industry, but it’s critical that they are used correctly, with the correct protocols in place. When consumers are booking travel, they should be confident in their purchase, knowing they have booked with a TICO-registered company.

*All names and companies in this article are fictitious and are used only to describe a current non-compliance trend.

Next page: Practical tips for using trade names