Five Star Tours sudden closure, ethical?

I am sure you and I both have heard of the recently news of Five Star Tour travel agency's sudden closure?

It has led many hundreds if not thousands stranded, worried if they could reimburse their bookings.

Recent updates from CASE (Consumer Association of Singapore) adapted from http://sg.news.yahoo.com/popular-travel-agency-five-star-tours-abruptly-shuts-down-033549516.html

 have indicated that customers with unfulfilled trips professionally can make claims through travel insurance or file claims through the Small Claims Tribunal or CASE.

Yes indeed, CASE have reacted promptly and in this aspect but i cant help but to start pondering and questioning of the ethics of businesses in Singapore, in particular travel agencies.

From the above link, I have adapted some quotes from respondents interviewed by the article's journalist as well as the comments of victims from yahoo.

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1. The 30-year-old housewife (who only wants to be known as Ms Chua) said she had paid Five Stars Tours S$2476 just earlier this week for a trip to Beijing for two people.She had gone on two tours organised by Five Stars Tours previously, and had a good impression of the company, she said.

When she heard that the company had shut its doors suddenly, she checked the receipt issued by Five Stars Tours, and realised that the staff who sold her the package and handled the paperwork for her did not sign on the document. Worried, she tried to call the different branches, and eventually made a police report when she could not get a satisfactory response.She recounted: "I wanted to pay by credit card, but the staff told me they only accepted cash as it was a special promotional package. I didn’t think much of it then, but I feel so stupid now.”)

2. Malaysian Leong Khoon An, who works as an electrician in Singapore, told Yahoo Singapore he had bought return bus tickets to Malacca for the coming Monday. When the 31-year-old heard the news of the agency abruptly closing its doors, he was “taken aback”and felt “cheated”, he said in Mandarin.“I’ve been a loyal customer, buying my bus tickets from Five Star for at least the past five years. Now they just up and close without refunding us, or even informing us,” he said.

3. Yvette Xu, 23, had bought a pair of tickets to Genting Highlands. The university student, who made the purchase only a few weeks ago, said: “If the company knew they were in trouble, yet continued selling tickets and packages to customers, they are really irresponsible.”

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Just from these 3 comments, it shows how much negativity is created from such an action.

It creates so much inconvenience for customers (as replacement tickets are difficult to come by and possible cost twice the amount due to the Chinese new year period).

People traveling out of Singapore in 2014 in hopes of meeting their families abroad delayed or worse crushed. 

People who had planned before in advanced for 2014 in hopes to travel to the destination of their dream with their loved ones spoiled.

Based on the comments above, it is noted that 5 star management and staff had refused to accept credit (cash only) and that despite possibly knowing that the company is facing cash flow problems as well as on the verge of bankruptcy, they have failed to inform nor refund their customers.

It is outright obvious that they were out to "cheat" these travelers of their initial deposits. I am not sure about the legality of this but i am sure that it is highly unethical to do so.

Such acts not only created much displeasure among consumers towards 5 Star travel, distrust and cynicism towards other travel agencies might also result from this incident.

When companies like 5 Star travel who have been a veteran in the travel industry gets bad publicity for such ethical scandals, the whole travel industry suffers.

Lastly think about this, if you're aware an unethical company, would you want to be associated (be it as an employee , customer or stakeholder) of that company?