TICO Certification: Resale, supplier failure and liability

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1. A wholesaler issued travel documents, but the customer has not paid the agent. Which requirement for the protection in section 43 is missing?

   1. A trip longer than one week
   2. The customer’s payment to the agent
   3. An agency with five years of registration
   4. A separate travel-insurance policy
   Show answer and explanation

   Correct answer: The customer’s payment to the agent

   Section 43 requires both customer payment to the agent and issue of documents by the wholesaler to an agent for the customer. Documents alone do not satisfy it. This question identifies a missing statutory condition; other contractual duties are separate.

   Based on: O. Reg. 26/05 s. 43; checked 2026-10-24

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2. A registrant bought hotel rooms for resale and the hotel fails to provide a room a customer paid for. What must the registrant do?

   1. Reimburse, offer a comparable alternative, or offer a future-travel voucher acceptable to the customer
   2. Refund only the commission it earned on the booking
   3. Refer the customer to the hotel's head office abroad
   4. Tell the customer to claim from the Compensation Fund
   Show answer and explanation

   Correct answer: Reimburse, offer a comparable alternative, or offer a future-travel voucher acceptable to the customer

   Section 46 places the duty on the registrant that acquired the rights for resale. It may reimburse, supply comparable alternatives acceptable to the customer, or provide a future-travel voucher acceptable to the customer. It cannot impose a voucher merely because it prefers not to refund.

   Based on: O. Reg. 26/05 s. 46; checked 2026-10-24

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3. Why does the law require customer money to be held in trust?

   1. To let the agency earn interest that it keeps for itself
   2. To protect customers until the supplier is paid or refunds made
   3. To make it easier for the agency to pay its staff weekly
   4. To give TICO an automatic share of every booking
   Show answer and explanation

   Correct answer: To protect customers until the supplier is paid or refunds made

   Customer money is held in trust and can only go to the supplier, back to the customer, or to the agent's commission after the supplier is paid, which protects customers' payments.

   Based on: Act s. 25; O. Reg. 26/05 s. 27; checked 2026-10-24

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4. An agent that bought rooms for resale reimburses customers after the hotel fails. Can it claim from the Fund as an agent?

   1. No, an agent that acquired rights for resale cannot claim that way
   2. Yes, as long as it files the claim within two years
   3. Yes, for the full retail value of the rooms plus its lost commission
   4. Yes, but only for the counselling fees it had charged
   Show answer and explanation

   Correct answer: No, an agent that acquired rights for resale cannot claim that way

   The travel agent reimbursement provisions do not apply if the agent had acquired the right to the travel services for resale; that registrant has its own duty to the customer under section 46.

   Based on: O. Reg. 26/05 ss. 58(2), 46; checked 2026-10-24

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5. An agency stops dealing with a wholesaler because the wholesaler seems financially shaky. What must it do?

   1. Ask its customers to vote on the decision
   2. Keep the reason confidential from everyone
   3. Promptly notify the registrar in writing, with reasons
   4. Post a public warning about the wholesaler on social media
   Show answer and explanation

   Correct answer: Promptly notify the registrar in writing, with reasons

   A registrant who stops trading with another registrant because of its apparent lack of financial responsibility must promptly notify the registrar in writing of the fact and the reasons.

   Based on: O. Reg. 26/05 s. 21; checked 2026-10-24

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6. In which case must a registrant reimburse the Fund for claims paid to its customers?

   1. When the registrant itself went bankrupt or ceased business
   2. Whenever a customer complains about the quality of a trip
   3. When a flight is delayed by bad weather at the destination airport
   4. When a hotel abroad failed through no fault of the agent
   Show answer and explanation

   Correct answer: When the registrant itself went bankrupt or ceased business

   A registrant must reimburse the Fund for claims paid to its customers if it is bankrupt, insolvent or ceased business, or if it extended credit and collected from the customer after the supplier had already failed.

   Based on: O. Reg. 26/05 s. 70; checked 2026-10-24

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7. What must a wholesaler have before it sells a supplier's travel services?

   1. An agreement with the supplier with all terms in writing
   2. A verbal promise from the supplier's regional sales manager
   3. A deposit from at least ten customers
   4. Approval from the customer's insurance company
   Show answer and explanation

   Correct answer: An agreement with the supplier with all terms in writing

   A wholesaler (or an agent that acquires rights to travel services for resale) may sell travel services only if it has an agreement with the supplier with all terms set out in writing.

   Based on: O. Reg. 26/05 s. 45; checked 2026-10-24

   Official reference ↗

8. A wholesaler honours a booking the agent never paid for. Which condition must it meet to claim from the Fund?

   1. It had no prior defaults from that agent and checked it
   2. It must be registered in another province as well
   3. It must have sold the trip at below its usual price
   4. It must have dealt with the agent for at least ten years
   Show answer and explanation

   Correct answer: It had no prior defaults from that agent and checked it

   A wholesaler can claim if the agent is registered, they dealt in good faith at arm's length, the agent failed to pass on the customer's money, there were no previous defaults by that agent, and the wholesaler took reasonable measures to ensure the agent was reliable.

   Based on: O. Reg. 26/05 s. 59(1); checked 2026-10-24

   Official reference ↗

9. A customer is entitled to repayment and the exception in Act section 25(2) does not apply. What is an agent or wholesaler’s liability?

   1. Only TICO, through the Compensation Fund in every case
   2. Each agent and wholesaler that got the money, up to what it got
   3. Only the airline or hotel that was to provide the service
   4. Only the agency that took the booking, whatever amount it actually kept
   Show answer and explanation

   Correct answer: Each agent and wholesaler that got the money, up to what it got

   Section 25(1) makes a recipient jointly and severally liable up to the amount it received. Subsection (2) provides an exception where the money was properly disbursed, dealings were in good faith and at arm’s length, and the other party was not breaching a registration requirement. Do not assume every recipient always remains liable.

   Based on: Act s. 25; checked 2026-10-24

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10. When may a registrant sell a package that includes air transportation?

    1. When the customer signs a release of all airline claims
    2. Whenever the airline's fare is the lowest available
    3. Only if the airline is based in Canada and Canadian-owned
    4. When the carrier has required licences, approvals or applications, and regulatory compliance
    Show answer and explanation

    Correct answer: When the carrier has required licences, approvals or applications, and regulatory compliance

    A registrant may not sell travel services including air transportation unless the carrier is licensed in all relevant jurisdictions, has or has applied for the necessary approvals and complies with Canadian and other regulatory requirements.

    Based on: O. Reg. 26/05 s. 47; checked 2026-10-24

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11. An agent booked a trip on credit and the customer never paid. Can the agent claim from the Fund?

    1. Yes, for the full price of the trip
    2. No, the customer must have paid through it
    3. Yes, but only half of the price
    4. Yes, if the trip was cancelled by TICO itself
    Show answer and explanation

    Correct answer: No, the customer must have paid through it

    A travel agent is not entitled to reimbursement unless the customer paid for the travel services to or through the agent and the agent passed the payment on to a wholesaler or end supplier.

    Based on: O. Reg. 26/05 s. 63; checked 2026-10-24

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12. A customer received none of the travel services paid for. What must the registrant pay the customer?

    1. Twice the commission it earned, as a penalty
    2. Only the counselling fee, not the commissions
    3. Nothing, because commissions are always earned once a booking is made
    4. All commissions and pay it received, except counselling fees
    Show answer and explanation

    Correct answer: All commissions and pay it received, except counselling fees

    If the customer received none of the travel services, the registrant pays the customer all commissions and other remuneration it received for them, except counselling fees, unless the Fund already paid that amount.

    Based on: O. Reg. 26/05 s. 64; checked 2026-10-24

    Official reference ↗