February 18, 2008
ARC does not enforce collection of debit memos entered into ARC Memo Manager. ARC defers to other BSPs to address how their respective systems work. The operation of ARC's settlement system, including ARC Memo Manager, is governed by the ARC Agent Reporting Agreement (ARA). The ARA is a unique contract involving three parties: ARC, on its own behalf, as well as on behalf of the carrier parties to ARC's settlement system, those carriers, and the travel agent. The Agreement clearly states that it does not cover the entire relationship between individual carriers and Agents, thereby leaving certain topics, such as fares, for individual negotiations between the carrier and the agent.
As a result, ARC has no independent knowledge of fares, commissions, or similar business terms between Carriers and Agents. ARC would be unable, for example, to determine the appropriateness of any specific fare ticketed by the Agent. If there is a dispute in this instance, the Carrier and the Agent must resolve it. ARC’s Memo Manager does, however, provide a convenient administrative vehicle for resolution between the agent and the carrier. It would be beyond the scope of ARC's contractual authority to demand payment of such amounts, or to make continued accreditation dependent on such payment. Within ARC’s Memo Manager, an Agent must accept a memo before it would be processed into their weekly ARC sales report. Memos do not get processed automatically without any action from the agent to accept the memo. The agent also has the ability to dispute a memo within the Memo Manager system.
There are certain debit memos issued by carriers that concern violations of the ARC Agent Reporting Agreement, such as those seeking to collect for sales not reported to ARC in the IAR report. Since ARC possesses knowledge to confirm or reject the basis of such an allegation, it is appropriate for ARC to pursue such debit memos/ breaches under Section VIII of the ARA. An agent's failure to cure such a breach within the specified contractual time period can result in the termination of the ARA.
