Rhode Island Sellers of Travel Law

"Travel agent" is defined as: ". . . any person employed by a travel agency whose principle duties include consulting with and advising persons concerning travel arrangements or accommodations"

"Travel services" is defined as: "transportation by air, sea, or rail, ground transportation, hotel accommodations, or package tours, whether offered or sold on a wholesale or retail basis . . . " The law requires each travel agency to maintain a fixed office conforming with local zoning regulations (Section 5-52-4.1). Applicants must demonstrate that they: 1. are owned/managed by a person at least 18 years of age, 2. have a good reputation for honesty, truthfulness and fair dealing, and 3. are competent and financially qualified to conduct the business of a travel agency in such a manner as to safeguard the interest of the public; and 4. have been a travel agent for at least one year prior to applying for a travel agency license during which year the applicant's time shall have been devoted to sales work within an agency for not less than thirty-five (35) hours per week, or shall furnish evidence that the applicant has been certified to have completed a course of study leading to qualification as a travel agency at a recognized educational institution. The law requires each travel agent to state in every advertisement its name and also its Rhode Island travel agent license number.

Apprentice Permits Apprentice permits are issued for six months for training under the strict supervision of a travel agency or travel agent.

A license examination An exam is administered for travel agent and travel agency licenses, ostensibly to demonstrate the applicant's "knowledge of reading, writing, spelling, elementary arithmetic, geography and in general the means and method to arrange or book travel reservations or accommodations, tickets for domestic or foreign travel by air, rail, ship, bus or other medium of transportation, or hotel or other lodging accommodations and of the state and federal statutes and regulations relating to the same." License fees must be paid every year in order to renew the license.

Bond Required of Travel Agencies - In addition, every travel agency must file with the Rhode Island Secretary of State prior to issuance (or reissuance) of a travel agency license, a bond in a form approved by the Director of Business Regulation, in the sum of $10,000.00. This bond is available to damaged consumers, only after all other legal remedies have been pursued. Under the Rhode Island licensing statutes, the state would most probably deem self-employed independent contractor outside agents to be "travel agencies". Employee outside agents, would most probably be considered to be "travel agents." For independent contractor agents, the import of this is that "travel agencies" must pay a higher annual license fee, they must have an "office so located as to conform with zoning laws," and more significantly, they must post with the Rhode Island Secretary of State, a bond in the sum of $10,000.00. The zoning requirement could probably be satisfied by operating a home office in a jurisdiction that allows home offices. "Home office exemptions" from residential zoning regulations are increasingly common. Any independent contractor outside agent proposing to do business in Rhode Island should consult with local Rhode Island counsel to explore the possibility of structuring their relationship with an approved travel agency, in order to avoid being classified as a "travel agency" and having to post the $10,000 bond. For example, perhaps the government of Rhode Island would agree to classify as a "travel agent", (as opposed to a "travel agency") an independent contractor outside agent having a written contract with an ARC/IATAN-appointed travel agency, with all monies being paid directly to the ARC/IATAN travel agency (such as the exemption allowed under the California and Florida Travel Promoter/ Sellers of Travel Laws). Rhode Island Travel Agency/Travel Agent Licenses may be revoked if anyone obtains a judgment against a travel agency or travel agent for conduct involving breach of fiduciary relationship between the customer and the travel agent.

Disclosure Notice Required The rules and regulations of the Rhode Island Department of Business regulation, (Title 5, Chapter 52 Business and Professions) require that the travel agent or agency must give to customers paying any money to the agent/agency a receipt and disclosure notice setting forth the following: a) the name, business address, and telephone number of the travel agency; b) the amount paid, the date of such payment, the purpose of the payment made, and a statement of the balance due, if any; c) the name of the carrier with which the travel agency or agent has contracted to provide the transportation, and the date, time, and place of such departure, if available; d) the conditions, if any, upon which the contract between the travel agency/agent and the carrier may be canceled, and the rights and obligations of all parties in the event of such cancellation; e) the conditions, if any, upon which the contract between the travel agency/agent and the purchaser may be canceled, and the rights and obligations of all parties in the event of such cancellation; f) a statement that upon cancellation of the transportation or other related services through no action of the purchaser, all sums paid to the travel agency/agent for services not performed in accordance with the contract between the travel agency/agent and the purchaser will be, unless the consumer otherwise advises the travel agency/agent in waiting, refunded by the travel agency/agent to the purchaser. The law further states that if the services contracted for a person are not available substantially as represented by the travel agency or travel agent in its employ, the travel agency or agent shall refund to that person monies lost by him. This places an onerous and unrealistic financial burden on the travel agency or travel agent.