Understanding BPC Section 17550.15:
California Business and Professions Code Section 17550.15 is designed to prevent travel agencies from using your vacation payments to cover their own operating expenses or debts. By legally imposing a fiduciary responsibility on the seller, the state ensures your money remains protected until the actual travel providers are paid.
Sources & References
The information on this page was was sourced from:
- Article 2.6: Sellers of Travel, California Business and Professions Code (BPC): The primary statutory framework establishing the financial requirements, refund mandates, and mandatory disclosures for travel agencies and ticket consolidators operating in California.
- Article 2.7: Travel Consumer Restitution Corporation, California Business and Professions Code (BPC): The legislative code establishing the state-mandated consumer safety net, funding mechanisms, and claim procedures for aggrieved travelers.
Exceptions: Credit Cards and Bonds:
There are two major exceptions built into the law that excuse a seller from using a physical trust account:
The Direct Credit Card Exception:
If a passenger pays via credit card, and the seller of travel processes the charge so the funds bypass the agency entirely and go directly to the airline or travel provider, the direct deposit rule does not apply. The seller must not deposit, negotiate, or seek to have the credit card charge credited to any account they control.
The Adequate Bond Exception:
In lieu of maintaining a trust account, a seller of travel can legally operate if they maintain an "adequate bond". To utilize this exemption, the seller must file a copy of the bond with the Attorney General before they even advertise their transportation or travel services.