CD Traveller » Consumer Protection

Merricks and Light on the Horizon

adrian — Sun, 15 May 2011 08:21:27 +0000

For longer than I care to remember, CD-Traveller has covered complaints, suggestions, conversations and proposals about reform the bonding system we have in place to help those who, through no fault of their own, are left in the wet and sticky when their tour operator or holiday company goes bust. The help you receive depends on how your package was booked and you may not even be aware of how the supplier or travel agent has put it together.
Now the CAA (who administer the ATOL scheme) has published the results of an independent review but it covers only claims handling. The reform proposals are not due to appear until much later in the year when some of the recommendations from this report will be included. The consultation period ended in early August last year. It has taken 9 months to give birth to just a 20 page document with an additional 31 pages of appendices! Am I being churlish especially as the author, Walter Merricks, admits the delay saying it was due to three more collapses last summer (Goldtrail, Sun4U and Flight Options/Kiss) and awaiting the government’s consultation on ATOL reform?
Yes I am because this report has deadlines and all should be in place for the start of the summer season next year.
Let’s skip to the nitty gritty. Merricks says that the legal framework of the ATOL scheme is outdated, some travel firms produce a poor standard of documents and, the system can’t handle the sheer volume of complaints that arose over the biggest collapse, XL and strict payment policies seem to exacerbate the situation. That payment to XL customers took over 3 months to settle in some cases, he suggests is wrong.
There are two features I would highlight. He suggests copying the insurance industry and paying out first and then seeking repayment from other parties later and that, if your company goes bust, the money you have paid could be used by a travel agent to buy another holiday, the travel agent being secure in the knowledge that the money would come from the bonding scheme.
The report comes just after a Travelsupermarket.com survey came out showing that only 14% of the 2,000 responders said that travel protection was important. That’s because we haven’t had a crash for a few months. Just because the great British public responders to this survey have forgotten the problems, the authorities shouldn’t. Anything to speed up and introduce wider protection to all travellers should be supported.

Is Your Holiday Protected?

Editor — Tue, 12 Apr 2011 08:08:36 +0000

April is the time by which holiday companies should have renewed their bonding. All licences expired on 31st March at which point 27 had not renewed. As of this morning, a further 5 had renewed. . Without this licence a holiday company cannot display the ATOL logo and you know that a holiday booked with them is as safe as any can be. Or at least, if the company goes bust, your money is protected.
But there are still companies, a further 22, that haven’t renewed. They are largely small companies and some will undoubtedly pay when they get around to it. But in the meantime they are forbidden to accept bookings unless they place it through another agent that is ATOL bonded. It can be hard for a consumer to be aware of this so the place to check whether the company you are planning to use is bonded is caa. If you put in the name of the company and nothing comes up, you know they are not bonded. If it brings up lots of names check carefully because there are lots of holiday companies with similar names. If in doubt you can always ring them. You will find details in our Travel Advice section under CAA who operate the ATOL boding system.
Since the beginning of the year, 6 companies have gone into liquidation and others have been taken over but in all 949 companies have renewed their bonds giving one of the highest take-ups for some years.

Diamond Holidays Go Down

adrian — Sat, 08 Jan 2011 14:29:48 +0000

Barely a week into the new year and we have our first travel company collapse. Diamond Holidays of Swansea have collapsed after over 40 years in business. Don’t get confused. There are 2 other similarly named companies and they are completely unaffected. It is only the company based in Swansea that has gone into administration. Already though, I have heard of two companies who have expressed interest in buying them. It is early in the year for any tour operators to go bust; they normally last through this key booking period to see how sales go so this is unusual. If you have holidays or day trips booked with them how will you fare since they hold no ATOL bond?
Diamond Holidays, also trading as Brian Isaac Coaches moved about 80,000 customers per year. They did have insurance taken out with the Association of Bonded Travel Organisation Trust (ABTOT) so those of you with holidays may be OK for a refund. ABTOT or Travel & General Insurance (who handle the insurance side) will be contacting all those concerned. The problem comes with those taking day trips, the sort where the coach takes you to York races for the day, a shopping complex or a historic town. It is unclear if these are covered, say the administrators, and they will add news on this when they have looked at it. Those people also not covered are those that have booked since the start of the new year since it may be the case that the insurance doesn’t cover this year. But if you have booked since January 1 and don’t receive a letter contact ABTOT anyway. Their website is www.abtot.com.
Why has Diamond Holidays gone bust given they say sales have risen by 15%? One reason suggested is the price of fuel which looks only likely to increase as oil prices rise and the April tax rise of fuel takes effect. But they have recently spend millions on new coaches. Is there a cash flow issue? Have they breached their bank loans limit? Did the banks pull the plug? As I said earlier, this is an unusual time to go bust so it will be interesting to see what the liquidators think is the reason.
Once again, though, this reminds all of us of the problems with the current bonding system and the lack of uniformity for travellers be they domestic or overseas ones. At least Diamond was a member of an insurance or bonding scheme. ABTOT has about 76 members and provides cover for those companies not bonded by the ATOL scheme. Still is this a substitute for being ATOL bonded? In some ways, yes particularly for those companies whose primary business is domestic travel like Diamond’s. All we travelers can hope for is that when the UK or EU finally get their acts together, one scheme will help protect all travelers.

Travel Dreams

adrian — Fri, 31 Dec 2010 10:58:45 +0000

Yesterday CD-Traveller covered the forecasts of ABTA for the coming year. As a change and since everyone else is forecasting (dreaming of what might be might be a better expression), I thought we would as well. Before that, however, let me wish you a happy new year. May 2011 bring all you wish for it because it certainly isn’t going to give me what I should like.
But let’s start with a quick review of the year – or at least from the point-of-view of the traveller.
Snow disrupted train, rail and air travel during the first bit of the year, – and then did exactly the same at the end of it. In between we had the British Airways strikes that caused more disruption and then the volcano. Not since the cod war, did Iceland receive so much attention. (It didn’t do them any harm; tourism to Iceland rose during the rest of the year.) Twice, one of our people was stuck in the mess of trying to return home. In this age of health & safety, the instant reaction was to close down any airport likely to be affected. Only when it turned out to be a longer event than planned did some rational thinking come into play. We had the usual succession of strikes through Europe to contend with plus the continuation of political unrest in Thailand. Tour operators and airlines went bust in the middle of the year before the summer season got under way putting even more strains on the bonding system. More of us cruised than ever before but one problem arose when due to the ash and weather and strikes, some people missed their cruises because they couldn’t get to the overseas ports. By booking air travel separately, some were left out-of-pocket as the bonding system was yet again shown to be deficient.. That could be one reason why people prefer to start cruising from UK/Irish ports. Even more ships will be based here in 2011 and Portsmouth will open a new cruise terminal.
What didn’t happen was more protection for those people who book air travel and accommodation separately. The ATOL bond covering package holidays is due for reform, there have been umpteen calls for the EU legislation to be altered and we await reports. Something is scheduled to happen in early 2011 but no legislation.
If I had a dream it would be – as readers well know – that politicians would get off their backsides and bring in legislation now so that each traveller pays the same sort of levy that ATOL booked holidaymakers do. Then all travelers are treated fairly. Will it happen in 2011? Legislation grinds slowly without political will. With no parliamentary committee on tourism what impetus is there? Politicians are anxious to take as much cash off us as they can through Air Passenger Duty (and tomorrow’s over-the-top rail fare increases) but reluctant to help consumer safeguards until the next airline or tour operator goes bust. Then, more words and more buck-passing.
So my wish for 2011 will probably be what I should like in 2012. And maybe even 2013. A fairer deal for travellers.

Airports and Passenger Interests.

Editor — Thu, 22 Jul 2010 09:25:21 +0000

What is the purpose of an airport regulator?
To make money? To manage the interests of our airports? Or the airlines? To control over-zealous ideas and practices? To make sure passengers fly safely?
I sometimes wonder.
Yesterday the Transport Secretary, Philip Hammond, announced that he was giving additional powers to the Civil Aviation Authority (CAA) so that it can “apply competition law in respect of airport operators and providers of airport services.” What this means, I think, is that the powers we thought they had are being given to them. Or which we believed were being handled by the Office of Fair Trading (OFT). Anyway it looks like the CAA has a bit more power. But this time the power is to look out for the passenger. Hammond said, “…the CAA’s primary duty will be to promote the interests of existing and future passengers.”
Since they haven’t been renowned for putting us travellers first, or sometimes even second, one can only hope that they will do something this time and be seen to do something. The CAA regulates the package holidays bonding scheme which we know as ATOL. See an ATOL bond and, in a time of collapse, you should be assured of getting your money back. But this doesn’t apply to airline passengers just flying from A to B without accommodation. It doesn’t apply if the company isn’t ATOL bonded.
There have been calls for the last couple of years to widen the bonding and travellers accept that they would have to pay a pound or two extra for this insurance. (After all package holidaymakers pay a levy of £2.50 per passenger.) Instead of saying there is a European solution being considered (true but I might get my pension first), it would be great step forward if the CAA acted unilaterally and offered us travellers wider protection.
Hammond also said that “significant investment will be required if passengers’ expectations are to be met.” Well what are our expectations? He says things like better baggage handling. I say how about having the Air Transport Users Council (AUC) complaints/help line being open for longer than a five hours a day on just Monday to Thursday. Has no-one told them that Saturday is still just about the busiest day of the week for leisure passengers? But then we’ve only known that for 30 years or so. Hammond also said that the Passenger Focus (the consumer watchdog for trains, buses and coaches) will not now take over the responsibilities of the AUC. So this body that has managed just one press release this year, seven responses to consultations and no response, that I can see, to the March 2009 CAA report on Passenger Experience at our four biggest airports will continue. The same report also noted that half of the respondents to a survey were unaware of their rights and even fewer were aware of the AUC. So if passengers are to be put first, it would help if passengers knew who could help them.
Lots of words. I’ll be less cynical when I see action.

More on the Goldtrail Collapse

Editor — Mon, 19 Jul 2010 07:49:21 +0000

Over the weekend, there has been lots of coverage of Goldtrail, the plight of those abroad and the efforts by the CAA to get them home. Holidaymakers affected are quoted as saying things like they are angry, everything was fine when they checked the website, why wasn’t there some notice and so on. Because Goldtrail had appeared on BBC’s Watchdog programme last year, some holidaymakers have suggested the writing was on the wall for the company then. The same program said that ABTA had fined them. Barrhead Travel in Scotland said that they didn’t sell Goldtrail holidays unless someone came in to their travel agencies and deliberately asked for one, suggesting they were concerned about the company.
So how can the holidaymaker know the company they have bought a holiday from is safe?
The answer is that they can’t. But there are some ways that might help.
Goldtrail sold holidays at the cheap end of the market. If when you look for a holiday and the price from one company is very different from the others you have looked at then be wary. It could mean that they have a great deal on offer but it could mean they are scrabbling for cash and are using that cash to pay old bills. That could be a sign that they are living from day-to-day. I ‘m not talking about a price difference of £10 or £15 per person but say over £75 per person
Ask your travel agent what they think of a company. If they are owned by a tour operator that you are consider travelling with then ask someone else,- another travel agent for example. The trade knows the gossip and they will want to help so that you come back to them next time.
Goldtrail is claimed not to have paid its hoteliers for 2 months and some say this should have been a warning. It is common in travel for bills to be paid even later than this. One I know, tried to negotiate 120 day payments. It is cash flow and if they can hold on to their money longer they will do so. This is no guide as to how strong or weak a company is.
That a company has been on Watchdog is no guide. Just about every travel company has at some stage from the biggest to the smallest. That there are comments on websites about them is no guide either. How recent are the comments? Do the bad comments-or the good ones- have the same language. In that case distrust it because there are certainly some fake comments that exist.
Finally, companies do go bust and there will be people who suffer. Company directors have a duty to trade until they recognise that the company is insolvent. Which means they will trade until the last minute in the hope that they can trade the company out of the crisis. So, we the holidaymakers, will always be the last to know-just after the employees who will be made redundant.
The one thing I am sure about is that there will be other tour operator collapses. The thoughts above may help. By that time, better consumer protection might finally come in

Summer and Bad News

Editor — Sat, 17 Jul 2010 11:42:52 +0000

With decent weather over much of our countries last weekend it looked as though things were set fare for a while. In the space of one week, we have had winds and heavy rain and then, to top it off, Goldtrail Holidays (which also used the name Sunmar) went bust yesterday evening leaving 16,000 abroad. Now it also seems that there may be a strike at all BAA airports (Heathrow, Stanstead, Southampton, Glasgow, Edinburgh and Aberdeen) during August.
CD-Traveller has frequently argued for wider consumer protection. In the wake of Globespan in 2009 and XL in 2008 (see CD-Traveller 14 Sept, 26 Nov, 17 Dec 2009), you might have hoped or expected that such high profile events might have stimulated some change. No, the EU prepared a document and sent it for consultation. The then government said it was an EU issue and we are no further forward. Yet we have had 11 cases of companies going bust this year.
To remind those unfortunate holidaymakers who booked with Goldtrail, if you are on holiday at the moment then enjoy the rest of it and the CAA will ensure flights for the return flight. If you booked just flights with them and then paid separately for your accommodation, check with the ATOL website or www.caa.co.uk/default.aspx?catid=2036&pagetype=90 (be patient it was very slow this morning) and your travel insurance. You may have to find return flights home and pay for them. Keep any and all receipts in case you can make a claim.
For those of you who are yet to go on a package holiday, (accommodation and the flight both through Goldtrail) and Simon Calder from The Independent estimated there might be up to 50,000 of you, then you will get a refund. This is small consolation since finding a holiday at this stage for the same price is unlikely. Chances are you’ll have to pay more. For those of you who just booked a flight with them and paid be credit card, contact you credit card company for a possible refund. If you paid in any other way, check your travel insurance for a possible refund.
And to top off a bad week, Unite is to ballot its members about strike action at all BAA airports because they have only been offered 1.5% pay rise. If they vote for a strike, the best guess is that it will occur sometime after the first week in August. How will it affect flights? The answer is that we will just have to wait and see.

FlyGlobespan Collapse Will Hit Scottish Holidaymakers

adrian — Thu, 17 Dec 2009 08:48:44 +0000

Regular readers can stop reading right now if they don’t want to hear me talk again about providing an adequate safety net for passengers outside the ATOL bonding scheme.

As you probably all know by now, those passengers who bought a package holiday under the Globespan name are probably protected under the ATOL system. Those of you who bought just a flight with a credit card (not a debit card)and paid more than £100 may be able to claim a refund from the credit card providers. The rest of you, I’m afraid, will probably be out of pocket. And for those of you who are covered then you still have the hassle and probable expense of rebooking with another carrier if there is availability. To check your position, see www.caa.co.uk/default.aspx?catid=1985&pagetype=90.

The collapse of the Globespan group will hit Scotland particularly badly. Coming relatively soon after the demise of Zoom which was also virtually Scottish it has meant that another major supplier of aircraft seats to Scottish tour operators has been lost. With such a large volume supplier (1.5 million passengers flew with them in 2008) it probably means that prices will be higher next year as a major competitor has been removed.

There have been calls from various bodies and us for a new bonding system that covers all flyers and holiday makers. Nothing can remove the annoyance and hassle if people have to rebook but at least there is some reassurance that they are protected if an airline does go bust. After Sky Europe went bust in September (CD-Traveller 14/9/2009) I asked when something would be done. In November the EU announced a consultation within the travel industry about greater protection for travellers (CD-Traveller 26/11/2009)

Now we are going to ask you what you think should be put in place and we will forward that to the EU. So in early January look out for a small survey from us and the European Tour Operators Association (ETOA) which will be e-mailed to you. It’s time this situation was sorted once and for all and that some remedies be made available to all travellers

EU Consults on Travel Protection

Editor — Thu, 26 Nov 2009 06:30:56 +0000

Starting today, the EU will consult with the travel industry over the next 8 weeks before coming up with new proposals on giving greater protection to travellers.

CD-Traveller has published many stories about this over the last year. You will know by now that you are protected if you buy a holiday package from someone who is ATOL bonded. Or so we thought. Recently the courts threw a spanner in the works by questionning what is meant by a “package” in a test case between the CAA (Civil Aviation Authority) and Travel Republic (see CD-Traveller 13 November 2009). Now even lawyers seem unsure about consumer protection regarding flights and holidays. Therefore it becomes more pressing that talk is relaced by some action. Just as night follows day, there will be other airline and tour operator collapses especially in this uncertain economic climate.

The EU Commissioner, Meglena Kuneva, in a BBC interview said that the existing situation “will not be tolerated.” Given that the consultation will take until the end of January 2010 and then the EU will go ahead and draft legislation, I cannot see any short term solution for travellers. But maybe the EU can really do something this time. In the meantime, check carefully when you book to see what level of protection you have.

When is a Duck not a Duck?

Editor — Fri, 13 Nov 2009 08:08:44 +0000

A spokesman from TUI (the owners of Thomson and First Choice) said this week that if a bird swims, quacks, waddles and looks like a duck then it must be a duck. The courts think otherwise. Most of you will never have heard of a company called Travel Republic but the result of a court action against it by the Civil Aviation Authority (CAA) might actually help travellers with better consumer protection for our flights and holidays.

At present, we are protected by the bonding scheme that CAA run through their ATOL scheme. If you buy a package holiday from a travel agent who carries an ATOL number you are protected in the event of the tour operator going bust. But if you separately buy a flight and accommodation you are not covered.

CD-Traveller has mentioned time and time again to the point of tedium that better protection is required for the traveller. Endless conferences, meetings and consultations have taken place. The EU is considering it but nothing happens. Maybe this will be a belated spur. Without going into the judgement, what it means is that some travellers who thought they might be protected may not be so. Do check. Buying a flight and accommodation at the same time from one supplier may not give you protection.

Amidst this confusion, it would be nice if the CAA, the EU and Uncle Tom Cobley and all got off their hands and did something instead of talking. But how many times has that been said over the last few years. And what’s the betting I’ll still be moaning about this in a year’s time?

UPDATE: The CAA is going to appeal this case