Consumer NZ concerned new Govt travel scheme won't help all customers

Consumer NZ is concerned the Government's new scheme to recover money owed in cancelled travel plans won't help consumers who booked through travel agencies that have already gone under.

Commerce and Consumer Affairs Minister Kris Faafoi announced the $47 million scheme on Tuesday which aims to refund $690 million of Kiwi holidaymaker's money tied up in overseas travel.

Kiwi woman Joy Barbarich had booked a dream holiday to Bali, but due to travel restrictions from the COVID-19 pandemic, it was cancelled. Barbarich stands to lose more than $6000.

"I definitely feel they have stolen from me and thousands of other New Zealanders," she said.

But Barbarich booked her holiday through STA Travel which has gone into insolvency.

"I'll never book through a travel agent again," she said.

Consumer New Zealand spokesperson Jon Duffy said the Government's scheme doesn't take into account Kiwis who booked through travel agencies that have already gone under.

"Travel providers that have gone into receivership or liquidation, unfortunately, travellers are unsecured creditors or likely unsecured creditors so they will have to line up behind secured creditors," Duffy said.

The scheme will work by paying travel agents a commission for every cent they get back for their customers. 

Travel agents will be paid 7.5 percent of the value of a cash refund or 5 percent of the value of a flight credit.

For example, if an agent recoups $10,000 in a cash refund, they will get $750; if the $10,000 is in a flight credit, they will get $500.

The Government hopes it will save the travel industry which has been devastated by the COVID-19 pandemic.