Friday, July 24, 2015

California Seller of Travel Law and Consumer Protections

California has one of strictest in the US seller of travel laws that apply to travel agents located in California OR those selling to Californians.  In this blog post, I outline the basic registration requirements and consumer protections provided by the law.

Registration Requirements

A “seller of travel” is anyone who sells, provides, furnishes, contracts for, arranges, or advertises air, land or sea transportation, either separately or in conjunction with other travel services to a California resident or from an office located in California, if the total charge to the passenger exceeds $300. California Business and Professions Code § 17550.1. California seller of travel law applies to retail and wholesale transactions, sales to tours operators, consolidators and wholesalers.

California sellers of travel are required to register at least 10 days prior to offering travel services in California or to Californians. Thereafter, there is a late fee of $5 per day, up to a maximum of $500. Registration is good for one year and must be renewed annually.  The registration number must be clearly and conspicuously displayed by the seller of travel on all advertising materials including newspaper advertisements, flyers, mailers, television and radio broadcasts, faxes, and websites. Registration is different from licensing (the later normally involves some review and approval). With registration, as long as the seller discloses the necessary information in its application, a registration number will be issued to the applicant.  One of the main purposes of registration is to make it easier for consumers and the state to identify and locate dishonest sellers of travel. Failure to register may result in civil penalties, the imposition of a cease a desist order prohibiting all advertisements (including websites) and possible criminal penalties for those that fail to display the California Seller of Travel Registration number (CST#).

Consumer Protections

Travel Consumer Restitution Fund. Californians who buy from a registered seller of travel whose principal place of business is also in California can file a claim with the Travel Consumer Restitution Corporation ("TCRC") which operates the Travel Consumer Restitution Fund, in case the consumer has not received what was paid for.  Consumers who purchased from an unregistered seller will not be able to obtain restitution from TCRC. To make a claim, go to

Disclosures. Registration requires the following disclosures:
Seller’s business addresses, fictitious business names (dba's) used, identifying information as to principals and owners, relationship with the airlines, the location of a trust account or information about a surety bond (if applicable). Prior to or at the time of receiving any payment, even a partial payment, a seller of travel must provide various written disclosures including an itinerary, cancellation policy, the total amount to be paid, the date of any future payment, the purpose of the payment made, an itemized statement of the balance due, if any, whether it has a trust account or surety bond, whether the payment is protected by the Restitution Fund, and how to make a claim to TCRC. If a seller fails to provide a cancellation policy in writing, it cannot later impose penalties in the event the consumer cancels.

Automatic Refund.  If there is a cancellation in violation of consumer’s contract, the law obliges seller of travel to issue a prompt and automatic refund without the consumer having to request a refund. Any material misrepresentation by the seller also entitles a consumer to an automatic refund.

Quick Ticketing. Once full payment has been received by the seller, it must promptly deliver to consumer any tickets purchased.

Credit Card Protections. An additional protection, that has nothing to do with the CA seller of travel laws, is to pay for travel services with a credit card. Federal and state law provides, in certain instances, for a right to reverse charges if the consumer does not receive what was paid for. Your card-issuing bank should be the first point of contact to verify the time limits and procedures for a refund.

Exemptions from Registration

If an individual meets all of the following conditions, s/he is not required to register:

(1) Has a written contract with a registered seller of travel to act on that registered seller of travel's behalf in offering or selling air or sea transportation and other travel goods or services in connection with the transportation.
(2) Acts only on behalf of a registered seller of travel with whom the person has a written contract in the offer or sale to a passenger of air or sea transportation and other goods or services in connection with the transportation and sells no other air or sea transportation or travel services to that passenger.
(3) Provides air or sea transportation or travel services that are offered or sold pursuant to the official agency appointment of the registered seller of travel with whom the person has a written contract.
(4) Does not receive any consideration for air or sea transportation or other travel services from the passenger.
(5) Requires the passenger to pay all consideration for air or sea transportation or other travel services directly to the air carrier or ocean carrier or to the registered seller of travel.
(6) Discloses both of the following:
(A) The person is acting on behalf of a registered seller of travel.
(B) The name, address, telephone number, and registration number of the registered seller of travel on whose behalf the person is acting.

California Business and Professions Code § 17550.20 (g).