Credit Card Processor Held $7 Million From Conquest
Posted May 14, 2009 12:00 pm.
This article is more than 5 years old.
Conquest Vacations was owed $7 million when it abruptly closed its doors last month, leaving thousands of would-be travellers out in the cold.
According to a published report, credit-card processing firm E-commerce Risk Management (ECRM) withheld the money from the tour operator – much of which was for future travel paid by Visa and MasterCard by Conquest clients. The document, prepared by a bankruptcy trustee, said some of the money will be refunded to customers.
Conquest announced it was shutting down on April 15, catching many off-guard. Some heard the news while on vacation and were stuck negotiating with unpaid resort managers. The business filed for bankruptcy later that month.
“Unfortunately this has been a result of overcapacity and price wars among the major tour operators, unrealistic and unreasonable demands by the credit card processing companies, credit squeeze and economic turmoil in recent months making it impossible for companies like Conquest to continue in business even after weathering many storms over the past 37 years,” the company stated on its website.
Processing firms like ECRM act as middlemen between credit-card issuers and retailers or service providers. They generally hand over cash within minutes of a purchase and are later reimbursed by the issuers.
But given the instability of the travel industry and the recent spike in corporate bankruptcies, processing firms have been withholding payment when airlines and tour operators do not have enough cash to refund tickets if they go out of business.
Conquest Vacations Unexpectedly Shuts Down, Angering Travellers
