Calif. requires written disclosures from out-of-state sellers
Mark Pestronk is a Washington-based lawyer specializing in travel law.
Q:In last week’s column [“Without
in-state account, selling to Californians is off limits”], you covered our trust-account obligations when
we sell travel to Californians under that
state’s seller of travel law. Aside from registering and using the trust account, are
there any other requirements that apply to
agencies outside California?
A:All sellers of travel must provide a
set of written disclosures to California consumers at or before the
time that the consumer pays any money to
the agency. This requirement applies in all
sales to Californians, with two exceptions:
First, sellers of travel that have sold air or
sea transportation to a customer within the
previous 12 months can provide the disclosures to the same customer for subsequent
sales within five days after the purchase.
No other travel solution
delivers lower fares.
Second, sellers of travel that are ARC-appointed and forward the amount paid,
without reduction, to the airline providing
the transportation or to ARC may make
disclosures about air transportation orally.
You must disclose:
• Your business name, address and phone
• the total amount to be paid by or on behalf of the passenger;
• the amount paid to date;
• the date of any future payment;
• the purpose of the payment made;
• an itemized statement of the balance
due, if any;
• the itinerary stating the name of the provider of the air or sea transportation; and
• the date, time and place of each departure or the circumstances under which the
date, time and place of departure will be
Next, you must conspicuously disclose
all cancellation terms and conditions relating to the air or sea transportation or travel
services. Any cancellation penalties not so
disclosed in writing are unenforceable.
It’s been proven in an independent study. On a
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In times like these, it matters.
That lack of enforceability applies to
your agency’s own trips as well as an airline’s, cruise line’s or tour operator’s cancellation fees and deadlines. So, if you don’t
explain a supplier’s penalties in writing
when you make the sale, the supplier cannot collect them in California.
If you have a trust account, you must
also disclose the bank’s name. Finally, since
your agency is located outside California,
you cannot participate in the California
Travel Consumer Restitution Fund, and
you must also disclose that fact.
The California Attorney General’s Office has published model disclosures, which
you can download at http://ag.ca.gov/travel/
forms.php. These disclosure requirements
appear to have been written for leisure sales
such as tours, charters and FITs, but the rules
also apply to corporate travel arrangements.
When you have a corporate account, it
is not clear whether you need to make the
disclosures to the corporation or to the
traveler. Since the corporation is the entity
paying you, you could try to put them into
your corporate-account contract so that you
don’t have to repeat them for every traveler.
You are no doubt thinking that these
disclosure requirements are not observed
by most agencies or enforced by the state. I
believe that this is largely correct. However,
now that you know the rules, you should
try to follow them. Failing to comply with
these requirements is a misdemeanor punishable by a fine and/or up to a year in jail.
To submit a question for Legal Briefs,
email Mark Pestronk at mark@pestronk