This week we've spoken to agents who have been threatened with - or already have had - their credit card facility removed by the banks.
It looks like the banks have lost faith in the travel industry. Since they were faced with big payouts after the collapse of XL Leisure and Freedom Direct, they see travel as a 'risky business'.
The candidates for ABTA chairman believe the issue of financial protection needs to be sorted out before relationships can be mended with the banks.
Have you had any problems with your bank? Why do you think travel is seen as 'risky'?
Our company, an independant, had a perfect history with Speedline through Nat West, never having had a chargeback or any problem since we started. A few years ago NW just pulled the rug on us with no explanantion other than they were dumping tour operators! They withheld 6 months card turnover, nearly half a million pounds! When they finally re-paid it in one go with no paperwork or accounts it cost me another £1200 for an accountant to work out the mess.
We switched all of our accounts to HSBC, they have insisted on holding a cash bond of £100,000 just to allow us to trade, needless to say we have had no problems from our side at all, but are now being told that we have to lodge even more cash with them, another £30,000 even though our card takings have reduced.
I could list many other problems we have encountered with HSBC, but I suspect the others may be as bad. There is nothing new about travel being seen as risky. In the past it was just an excuse to extort money from us, now they have a concern as even the government, via the CAA have not paid up when they were faced with the XL collapse. I do wonder why we pay so much for our ATOL bond as we have since 1992.
The CAA are also of course trying to charge us for the repatriation of clients on XL flights where the ATOL payment was made, this one I am still fighting. Anyone else in this position since the collapse of XL? Let me know maybe we can help each other.
DiveLeader
The main problem is the banks do not understand the difference between an agent and organiser. We where told by elevon that we held the monies till after departure as an agent, once they realised that agents receive the money's at balance due date and forward it on within a few weeks they where amazed. This was speaking to someone at Elevon who specialised in setting up Travel Agency accounts! The merchant provider saw there risk as being months not weeks, no wonder they panic about Travel Agencies.
Things are URGENT within our industry now. The banks have little or no understanding of this industry. Lets hope that the new ABTA chairman will put this on the top of his agenda.
My agency, Wellington Travel was trading well but needed cash flow help through 4 months. My new HSBC business manager completely ruined my life!!
After 18 years trading with an average turnover at £1million, HSBC froze my bank account on a Wednesday in February, and my ABTA licence was pulled by 09:00 Thursday, even though I had over £220,000 worth of forward business already booked.
After an extremely traumatic time, I have managed to find a position back in travel. My case was SO severe that my MP has taken my case up with the directors of HSBC. This surely shows the appauling lack of understanding about our industry. How the banks love it when this industry provides them with such high turnover when things are good.
My life is ruined by the banks. Something MUST be done quickly, before anyone else is forced to go through what I have had to endure. Also ABTA needs to have a comfort zone and help for members instead of leaving us out to dry....
Di Baker
Nick,
Read my reply
Hi, thanks for all your comments. DiveLeader, how come you are being charged for clients who were caught up the XL collapse? I thought the CAA was liable for that?
Chloe
I am sorry to hear about all the problems some of you are having, I am extremely concerned as I am trying to take my business of 28 years from a partnership to a limited company, that won’t happen if I can’t get merchant services and all that I have spent in the process will be lost. Not to mention all the hard work involved when you have to clear everything with ABTA, IATA and the CAA. I feel I have been cycling uphill for months now and still have the merchant services hurdle to clear.
I approach everything as a layman (it has its advantages) and see nothing wrong in protecting my livelihood, if I am told anything I don’t like I challenge it! There’s no point keeping your nose clean if it doesn’t have any advantages and so I always play up just how clean my nose is!
I would hope that every case is judged on its merits and if so then track record will certainly count, I’ll soon find out as I am due to call my merchant services people tomorrow for an update, with all I have been reading of late I am quite worried!
The banks seem to have us over a barrel, and what I don’t understand is why our associations have not secured, yes that’s right secured, these faculties for us as part of the value they bring to our business as members. I mean we have to be “financially fit” we have to have experienced staff and by and large we have to be” squeaky clean”, so with all this surly we are “low risk” and hence my previous point, why can’t our associations secure merchant facilities for us?
Some merchant services providers have become associated members of some of our associations. Why I ask myself? Because they want to cherry pick I feel, whilst members they should at least take the time to learn about the industry!
Our business has also experienced similar problems mentioned in previous posts but the additional problem which although I agree is on a much lower but equally important level is the lack of response and decision making authority from/of our appointed manager. In addition to this we have experienced a number of bank practices and policies which constrain our business operations on a daily basis.
Our organisation acquired a small business earlier this year. The acquired company banked with Lloyds/TSB, this represented a new banking relationship for us as the new owners. Following the acquisition the bank deducted management fees relating to the outgoing owners banking arrangements. Despite raising this issue at the time and several times since with no resolution (or refund) I have now asked the bank for compensation for our loss. It seemes our bank manager was rendered speechless by my request and excused their lack of attention to the matter by telling me how "manic it has been here" and gave me a rather half hearted commitment to sort it out next week.
Other such examples of poor operational and customer service are:
1. 10 weeks to process an application for online business banking
2. Our manager is constantly in meetings, out of the office or on holiday and rarely returns my calls
3. emails remaining unanswered and email content not actioned - as a consequence unauthorised debit transactions were paid out of our account after I gave instruction for them to be stopped......they have not been recovered.
4. Despite maintaining a decent cash balance the bank would only give us a company credit card if we presented monthly management accounts to justify the "facility".
......I could go on. Under normal circumstances the less contact I have with our bank the better but when you acquire a business there are understandably many operational & financial changes. The banks co-operation is critical to a successful integration. By not delivering a professional and responsive service our businesses are compromised.
I dare say if one of our customers overpaid and we took three months + to refund them we would be in front of an ABTA code of conduct committee facing a hefty fine or possibly threatened with expulsion.
It all seems a little one sided to me !!!!
Bluesky
It is interesting what how different Bank Managers act. My Manager could not of been more helpful, checks on us quarterly, tends to sort out problems within hours. When he went on holiday for 2 weeks a small request we made to the bank showed how good he was, it took 9 working days 7 phone calls plus a personal appearance at the bank to achieve what I was after, a reduction in my overdraft. When my Manager got back he rang me to let me know he was in the office and I told him of the problems, he checked into and it still had not been done properly and it took him 3 minutes to sort it out while I was on the phone.
So if you get a good Manager (and we are on number 4) keep them.
It sounds like you have a good one there.....do you mind me asking which bank ? and is your manager a travel industry 'specialist'. I know barclays have a travel & leisure team and have had negative experiences with them too.
Lloyds in our home town, when we started we demanded that we get to deal with the local manager, rather than a call centre out of county. This works very well for us. Local Managers are normally limited to 1 million though put, but banks will make exceptions, under guidence from someone further up the chain.