ARC (Airline Reporting Corporation)
All travel agents must post a seller of travel bond because they handle large amounts of money that must be delivered as payments to the companies providing services for the traveler. If a travel agent fails to forward funds to the appropriate company, the bond allows the company to regain its losses by filing a claim against the bond. If the claim is found to be valid, the travel agency will be responsible for paying the company to whom money was due.
The Seller of Travel bond is usually required by the state or locality in which the travel agency is based. However, many service companies such as airlines or hotels might also require the bond to do business with a travel agency.
Bonds encourage agencies to:
• act ethically
• appropriately forward their customers’ money to the correct parties
• provide customers with the widest range in travel options
Like other surety bonds, seller of travel bonds are usually purchased through companies that specialize exclusively in selling surety bonds. Several large online bond specialist companies can currently be found online. Regardless of where the applicant chooses to get his or her bond from, he or she will be subject to:
• an extensive credit check
• a financial survey
These checks confirm that the applicant is financially stable enough to pay the full value of the bond if a claim is made against it. If an applicant has poor credit, he or she may look to a company that specializes in high-risk bonds.
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