Canada Exam Prep
TICO Certification overview

TICO Certification: Compensation Fund claims

  • 12 questions
  • Topic drill
Answered 0/12

Preparing your questions…

Question 1 of 12Score 0/0

A trip won in a radio contest is cancelled when the agency fails. Can the winner claim from the Fund?

Study reference: TICO study notes from the Travel Industry Act, 2002 and O. Reg. 26/05 (Oct 2026), Ch. 10 Compensation Fund claims — O. Reg. 26/05 ss. 50–63, 71

All 12 questions in this test

Every original question, with optional answers, explanations and official references. Open an answer to study, or take the test above for instant feedback.

  1. A trip won in a radio contest is cancelled when the agency fails. Can the winner claim from the Fund?

    1. Yes, for the trip's full retail value
    2. Yes, if the radio station was a registered agent
    3. Yes, but only for the taxes on the prize
    4. No, prizes, awards and goodwill trips are excluded
    Show answer and explanation

    Correct answer: No, prizes, awards and goodwill trips are excluded

    Travel services that were to be received as a prize, award or goodwill gesture are not reimbursed by the Fund.

    Based on: O. Reg. 26/05 s. 57(3) para 5; checked 2026-10-24

    Official reference ↗

  2. A foreign hotel is the failed end supplier, rather than a failed registrant. Does its bankruptcy qualify for standard Fund reimbursement?

    1. Yes, but only if the hotel had been booked through a wholesaler in Ontario
    2. No, failure of an end supplier other than an airline or cruise line is excluded
    3. Only if the customer paid the full price in cash to the travel agency
    4. Yes, the Fund covers the failure of any supplier anywhere in the world
    Show answer and explanation

    Correct answer: No, failure of an end supplier other than an airline or cruise line is excluded

    Section 57(3)1 excludes non-provision caused by failure of an end supplier other than an airline or cruise line. An intermediary acquiring rights for resale may separately owe remedies under section 46. The Fund exclusion does not automatically erase other duties or insurance rights.

    Based on: O. Reg. 26/05 s. 57(3) para 1; checked 2026-10-24

    Official reference ↗

  3. Which registrants must participate in the Travel Industry Compensation Fund?

    1. Only tour operators that sell packages abroad
    2. Only registrants that choose to join it
    3. Only agencies with over $2 million in sales
    4. Every registrant
    Show answer and explanation

    Correct answer: Every registrant

    Every registrant must participate in the Fund; TICO's board administers it and holds the money in trust for approved claimants.

    Based on: O. Reg. 26/05 s. 50; checked 2026-10-24

    Official reference ↗

  4. The board refuses a customer's claim. How long does the customer have to request a Licence Appeal Tribunal hearing?

    1. 15 days after being served with the decision
    2. 90 days after the trip's planned return date
    3. 30 days after the date of the claim
    4. One year after the registrant failed
    Show answer and explanation

    Correct answer: 15 days after being served with the decision

    A claimant may request a hearing by mailing or delivering a written request to the registrar, TICO and the Tribunal within 15 days after being served; otherwise the board's decision becomes final.

    Based on: O. Reg. 26/05 s. 71; checked 2026-10-24

    Official reference ↗

  5. A travel agent refunded a customer after a wholesaler failed. What can the agent recover from the Fund?

    1. Only its counselling fee, but not the customer's money
    2. The portion it passed to the wholesaler, plus commission owing
    3. The full price, plus its counselling fee and its staff costs
    4. Nothing, since agents may never claim from the Fund
    Show answer and explanation

    Correct answer: The portion it passed to the wholesaler, plus commission owing

    Assuming the other section 58 conditions are met and the customer would otherwise have an eligible claim, recovery is limited to the customer money passed on, plus commission owing. Counselling fees and other remuneration are excluded. An agent that acquired the rights for resale falls under a separate exclusion.

    Based on: O. Reg. 26/05 s. 58; checked 2026-10-24

    Official reference ↗

  6. An airline that a customer booked through an Ontario agency stops operating. What is different about this claim?

    1. The claim must be filed in the airline's home country instead
    2. No demand on the agent and wholesaler is needed first
    3. Only the agent may claim, not the customer
    4. The limit is doubled to $10,000 per person
    Show answer and explanation

    Correct answer: No demand on the agent and wholesaler is needed first

    For an airline or cruise-line end-supplier failure, section 57(4) removes the specified agent/wholesaler demand and non-repayment conditions. Other demands and eligibility rules, including possible insurance or other legally owed reimbursement, remain relevant. It is not an automatic double recovery.

    Based on: O. Reg. 26/05 s. 57(4); checked 2026-10-24

    Official reference ↗

  7. A customer complains the hotel was worse than expected and claims from the Fund. Is the claim eligible?

    1. Yes, up to half of the price paid
    2. No, claims based on cost, value or quality are excluded
    3. Yes, if the customer complains within 30 days of returning
    4. Yes, the Fund covers any disappointing trip
    Show answer and explanation

    Correct answer: No, claims based on cost, value or quality are excluded

    Claims based on the cost, value or quality of delivered services are excluded. The Fund concerns eligible paid-but-unprovided services following the failure of a registrant or specified airline/cruise supplier, with other statutory conditions and exclusions.

    Based on: O. Reg. 26/05 s. 57(3) para 9; checked 2026-10-24

    Official reference ↗

  8. The board asks a claimant for more documents. What happens if they are not sent within 12 months?

    1. The claim is sent to the Licence Appeal Tribunal
    2. The claim is paid automatically at half of its value
    3. Nothing; there is no deadline for documents
    4. The claim is treated as abandoned unless that would be unfair
    Show answer and explanation

    Correct answer: The claim is treated as abandoned unless that would be unfair

    If requested additional documents or information are not provided within 12 months, the claim is treated as abandoned, unless the board is satisfied that would not be fair.

    Based on: O. Reg. 26/05 s. 61(3); checked 2026-10-24

    Official reference ↗

  9. Which payment method is not itself excluded by the Fund’s standard payment-method rule?

    1. Air miles redeemed with no money paid
    2. A free trip given to the customer as a goodwill gesture
    3. A payment that a third party never made
    4. Cash, cheque, credit card or a similar method
    Show answer and explanation

    Correct answer: Cash, cheque, credit card or a similar method

    Cash, cheque, credit card and similar payment methods are not excluded on that ground. Redeemed travel vouchers have a statutory exception, while a voucher received as a prize remains excluded. A permitted payment method does not by itself establish eligibility; all the other claim conditions still apply.

    Based on: O. Reg. 26/05 s. 57(3) para 6; checked 2026-10-24

    Official reference ↗

  10. How long does a customer have to make a claim to the Fund?

    1. Six months after the registrant or end supplier fails
    2. Two years after the booking was made
    3. Thirty days after the planned date of departure
    4. There is no time limit for Fund claims
    Show answer and explanation

    Correct answer: Six months after the registrant or end supplier fails

    Claims are made in writing to TICO's board within six months after the relevant registrant or end supplier becomes bankrupt, insolvent or ceases business; claims made later are not valid.

    Based on: O. Reg. 26/05 s. 60; checked 2026-10-24

    Official reference ↗

  11. A customer paid a registered Ontario agency for a trip, and the agency went bankrupt before the trip. What generally lets the customer claim from the Fund?

    1. Holding a valid passport and a travel insurance policy for the whole trip
    2. Living in Ontario for at least two full years
    3. Booking the trip at least 90 days in advance
    4. Paying via a registered agent, demanding repayment, and not repaid
    Show answer and explanation

    Correct answer: Paying via a registered agent, demanding repayment, and not repaid

    A customer is reimbursed for services paid for but not provided if the payment went to or through a registered travel agent, the customer demanded repayment from the agent, wholesaler and others obliged (including insurers), and was not repaid because of bankruptcy, insolvency or closure.

    Based on: O. Reg. 26/05 s. 57(1); checked 2026-10-24

    Official reference ↗

  12. Which amount is never reimbursed by the Fund?

    1. Counselling fees paid to a travel agent
    2. A final payment for a tour that never ran
    3. The deposit paid for a cancelled package
    4. Money for a cruise when the cruise line failed
    Show answer and explanation

    Correct answer: Counselling fees paid to a travel agent

    The Fund does not reimburse counselling fees paid to a travel agent, insurance premiums, prizes or goodwill trips, consequential damages or claims about the quality of services.

    Based on: O. Reg. 26/05 s. 57(3) para 4; checked 2026-10-24

    Official reference ↗

Compensation Fund claims: key rules to remember

Our summary of what the official handbook says on this topic, in our own words. Read it before or after the practice questions above, then check the original chapter. Read the official chapter ↗

The Fund

  • Participation: Every registrant must participate in the Travel Industry Compensation Fund; TICO's board administers it and holds the money in trust for approved claimants.

Customer reimbursement

  • Claim conditions: A customer is reimbursed for travel services paid for but not provided if the payment was made to or through a registered travel agent; the customer demanded payment from the agent and wholesaler, anyone else who received the money and anyone legally obliged to compensate (such as an insurer); and was not repaid because the agent or wholesaler is bankrupt, insolvent, or has closed and is unwilling to pay or cannot be found.
  • Loss limit: Reimbursement is limited to the amount paid to or through registrants for the services not provided.
  • Airline exception: For an airline/cruise-line failure, s. 57(4) removes only the specified agent/wholesaler demand and non-payment conditions. Other reimbursement demands, exclusions and eligibility requirements remain.

Not covered

  • End-supplier exclusion: Failure of an end supplier other than a cruise line or airline (for example a hotel).
  • Services offered: Services that were provided, or for which alternates were provided or offered.
  • Customer fault: Services missed because of the customer's own act or failure to act.
  • Excluded fees: Counselling fees; insurance premiums.
  • Prizes: Prizes, awards or goodwill gestures.
  • Payment method: Services not paid for with cash, cheque, credit card or similar, subject to the redeemed-voucher exception. A voucher received as a prize remains excluded; a payment method alone does not establish eligibility.
  • Quality: Claims based on the cost, value or quality of the services.
  • Director-arranged services: Services provided through Fund-directed immediate departure or trip completion.
  • Indirect losses: Consequential or indirect damages.

Claim process

  • Filing deadline: Claims are made in writing to TICO's board within six months after the registrant or end supplier becomes bankrupt, insolvent or ceases business; later claims are not valid.
  • Additional documents: The claimant provides the documents the board needs; if requested additional documents are not provided within 12 months, the claim is treated as abandoned unless that would be unfair.
  • Subrogation: The board may require the claimant to transfer (subrogate) related claims against third parties to TICO.

Registrant claims

  • Agent claim: An agent may recover qualifying customer money passed on, plus commission owing, when the s. 58 conditions apply and the customer would otherwise have an eligible claim. Counselling/other service fees are excluded; an agent acquiring rights for resale has a separate exclusion.
  • Wholesaler claim: A wholesaler that honoured services the agent never paid for can claim the portion the agent kept, if it dealt with the agent in good faith, had no previous defaults with that agent and took reasonable steps to check the agent's reliability; bounced agent cheques count only if received within seven days of departure and deposited promptly.
  • Unpaid credit: A registrant that extended credit and was never paid by the customer cannot claim.

Disputes

  • Claim appeal: A claimant whose claim is refused can request a Licence Appeal Tribunal hearing within 15 days of being served; otherwise the board's decision is final.

TICO (consumer information)

  • Ontario scope: The Fund protects customers who book with Ontario-registered agencies and websites; it may not cover bookings with businesses based in other provinces or countries.

Study the Compensation Fund claims rules as flashcards →

Other topics

Full practice tests