PACKAGE Vacation customers who accept coupons for canceled trips will be refunded if the companies go bankrupt later, the government has announced.
Package holiday customers whose trips have been canceled due to the coronavirus pandemic are eligible for cash reimbursement, although many travel agencies offer reimbursement credit notes to help with their cash flow.
These allow customers to book their vacations again or request their money back at a later date, but there are doubts about their protection by Atol.
The system is normally used to prevent package holiday customers from being stranded abroad or losing money on future bookings when operators collapse, as happened with Thomas Cook in September 2019.
The Civil Aviation Authority (CAA) said that the Ministry of Transport had brought “the necessary clarity” by confirming that these cases would be covered by the Atol program.
Consumer group Which one? advised people to reject the refund credit notes and “insist on a refund” because of concerns about their value if the issuing company goes bankrupt.
Transportation Secretary Grant Shapps said: “We want to send a clear message to passengers so they can book their summer vacation with confidence, which is why we are stepping in to protect the refund credit notes issued. following the cancellations of Covid-19.
WHAT IS ATOL
ATOL coverage means that if your package vacation business goes bankrupt and your vacation can no longer continue, you will be entitled to a refund. if you have not yet traveled, and hotel costs and return flights if you are abroad.
You will receive an ATOL certificate from your travel agency when you make your payment, and you will need to keep the certificate secure.
“This is not only good news for anyone looking to get away for a break in the sun, but also for the aviation and travel industry which has been hit hard by the pandemic. ”
The announcement covers refund credit notes issued between March 10 and September 30 for package holidays canceled due to Covid-19.
Consumers are still entitled to a cash refund within 14 days, although thousands have had to wait longer to get their money back.
ATOL protection will not apply to reservations purchased using a refund credit note, where the reservation would not normally benefit from ATOL protection, for example a refund credit note is used to make a reservation accommodation only.
CAA Consumer Director Paul Smith said: “This news brings much needed clarity to consumers, who should now be confident that their money is safe if they have chosen to accept a refund credit for their canceled reservation protected by Atol. ”
Travel industry organization Abta said the announcement “reassures consumers and supports the travel industry at a particularly difficult time.”
Which? Travel editor Rory Boland said the clarification would be “a huge relief” for customers who accepted the refund credits.
He added: “This is a positive step towards restoring confidence in the travel industry. ”
Some travel agencies offer vouchers rather than paying off credit notes.
Although these are often worth more than the original reservation, to encourage customers not to ask for cash, the CAA said they were not protected by Atol.
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The government is the funder of the Atol program, managed by CAA.
Travel agencies are required to pay £ 2.50 for each package holiday customer.
The money goes to a fund which is used to repatriate or reimburse travelers in the event of insolvency.
Which one yesterday? stated that Ryanair refused to reimburse customers for travel booked by Cyrus.
We also revealed the worst rates for vacation companies according to customers.
Additionally, we’ve explained how to get a refund if your trip has been canceled due to the pandemic.