Personal Law
January 8, 2020

Holiday or Bust

Holidays – once booked and paid for, sit back and look forward to a lovely stress free break? The recent collapse of Thomas Cook has reminded us that unfortunately it doesn’t always work that way.

So where do you stand when holiday companies or airlines go bust?

Can I still go?

The first thing to do is contact the holiday company to see if your booking is still effective. If they are no longer taking calls then you can go directly to the airline and hotel to see if the booking is in place. Check it has been paid for – there were stories of holidaymakers being “held hostage” by hotels which had not been paid by Thomas Cook. If the bookings are in place and paid for, you should be good to go but it would be prudent to keep checking.

ABTA/ATOL – how can they help?

If your booking is not in place then your next steps depend on whether you are ABTA or ATOL protected, whether you have insurance, whether you paid on a credit card and whether you booked a package, a “DIY” package or just flights. Check the holiday company’s website, and the documents you were sent, to see if your holiday is ABTA or ATOL protected.

All tour operators who sell flights are required to have an Air Travel Organiser’s Licence (ATOL). If your holiday company goes bust you can apply to the Civil Aviation Authority (CAA) for a refund. If you’re stranded on holiday with hotel/flights home not paid for then the CAA should repatriate you.

ABTA is a UK travel association which offers similar protection if one of their member travel agents/tour operators goes bust. Whereas ATOL covers flight-based holidays, ABTA is generally for land or sea based packages such as coach/railway tours or cruises

Did you take out insurance?

Travel Insurance is not just for medical emergencies and personal belongings. Some policies will cover you if the tour operator or airline goes bust. This is one reason why it is a good idea to buy travel insurance as soon as you have booked your holiday, rather than the day before you go! Check the small print if you want cover for other companies going bust, and remember this is unlikely to be covered with the cheap “bare bones” policies.

Did you pay on a card?

If none of these options are available, you may be able to recover the money through your credit card company under S75 of the Consumer Credit Act 1974. This is the case if you paid more than £100 of your holiday or flight booking on a credit card and booked directly with the airline or tour operator. Some credit card companies will refund you even if you booked through a travel agent and it is the travel agent’s name on the credit card transaction. As travel companies are no longer able to charge an extra percentage for credit card payments, it makes sense to use a credit card if you have one.

Even if you paid on a debit card, all may not be lost! Under the Visa and Mastercard Chargeback scheme you can ask your bank to reverse the transaction on your debit card so that you get your money back. This is not a legal requirement like S75 for credit cards, but most high street banks adhere to the scheme.

So…. which of these options will apply?

Well that depends on what and how you have booked your trip.

A package holiday is where you book more than one part of your holiday (usually flights and accommodation) through the same operator or website. Booking a package holiday may not give you the flexibility of booking separately, but it is a safe option. Most travel companies in the UK are ATOL registered. If the holiday company is not UK based and not ATOL registered then you should look at travel insurance to cover potential claims, and it would be prudent to pay on a credit card.

More and more people are booking the different parts of holidays separately. The ATOL scheme now covers these holidays provided the flights and hotel/car hire were booked within a day of each other through the same tour operator or website (It must be with the same ATOL supplier).

If you booked a flight only, ATOL will only apply if you don’t receive your tickets immediately. Further, if you book directly with the airline or Airline Ticket Agent ATOL will not cover you. If you booked directly with the airline you would be looking at travel insurance or your credit card company/bank if the airline goes bust. If you booked with an Airline Ticket Agent contact them in the first instance as they may have provided travel insurance that includes Scheduled Airline Failure cover. Check also to see if you booked the flights with a company that holds an ATOL and you received confirmation from the company when you booked that you were ATOL protected.

If you are still having difficulties, for example if you are having trouble getting your insurance company to pay out, then the experienced solicitors in our Dispute Resolution department would be happy to help. We offer initial fixed fee interviews for £100 + VAT so please call Berry & Lamberts on 01892 526344 if you would like to see someone.

The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.

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