ATOL vs ABTA - and holiday companies going bust

[easyonthespice]

I have copied this from another post I've made in response to a question, as it's that time of year when we are all thinking about spending our hard earned cash, if you want to go abroad.

Tour Operators like First Choice and Thomson provide 100% financial protection when they sell holidays, because they hold an ATOL (they are providing a Tour Operator Package Holiday).

Many smaller Tour Operators will also hold and ATOL and provide the same 100% consumer protection as the big boys do. Look out for the ATOL logo and check the ATOL number on the CAA website.

Travel Republic and many others do not hold an ATOL, they do not provide consumers with ATOL financial protection for holidays which include flights, Travel Republic are acting as an agent only for each component ( flight + hotel ) you book on their website.

It is totally possible that two people can be sat next to one another on an aircraft and going to the same hotel and, depending how they booked, one is protected and one is not.

www.caa.co.uk How ATOL protection works and how it can protect your holiday booking.

If you book with your Credit card, the Credit card company will only pay you back for the service you didn't get, ie if you accommodation supplier goes bust or the airline or ticket agent (Goldtrail, Kosmar, XL, Holidays 4U anyone?), they will only pay out for that individual cost, not for the all the items which make up your travel arrangements (flight, hotel, transfers car hire etc) if you can't use one of them, you still have to use the rest or loose out.

General Holiday Travel Insurance does not cover any of this.

All travel companies selling air holiday packages and flights in the UK are required by law to hold a licence called an Air Travel Organiser?s Licence (ATOL).

In the event of an ATOL holder?s failure, the ATOL Scheme ensures customers who paid and contracted with the ATOL holder for an air holiday package or a flight, do not lose the money paid over or are not stranded abroad. The ATOL scheme does not protect people who book flight only direct with airlines. If you are booking a flight only, use your credit card.

ABTA (Association of British Travel Agents) ABTA DOES NOT provide the same protection as ATOL. ABTA are just a travel trade association of travel agents, they do provide a protection plan, normally as an extra charge, which may cover some loss, but it is not like having ATOL protection.

If you book a holiday through an ABTA travel agent, you should first ask your travel agent to confirm that the "whole holiday you?re booking with them is ATOL protected", and that you will receive a full refund or be brought home if the holiday company fails. If you receive the answer ?yes?, make sure you receive an ATOL Receipt that confirms all your holiday arrangements are covered. If they say "no" then they are providing components and not a "holiday", so ask them what is protected should they or any of their suppliers go bust. Don't be afraid to ask. It's your money in their hands.

This is all only relevant to UK consumers booking with UK Travel Companies / websites. Website which are NOT UK based do not have the same regulations and I would not recommend you book with them. Under UK weblaw UK websites have to show a UK postal address (Not a PO Box), any site that only has a contact by way of a form (email contact only) I would stay well clear of.

If you have read this far, I'm amazed.
I have name changed FWIW.

Disclaimer:
I'm not a lawyer, I haven't got a grudge against any travel firms.
This is 2012, the law and travel rules may change.

Holiday financial protection is confusing and the post above explains some of the issues. However, there are some points ABTA wants to clarify.

ABTA ? The Travel Association, is the largest travel trade association representing both travel agents and tour operators as well as providing consumer advice and support. We play a key role in regulating the industry and ensuring our members adhere to a strict code of conduct so that their customers can enjoy hassle-free holidays.

For guaranteed financial protection the best thing is to book a package holiday. By law (The Package Travel Regulations 1992) a package holiday must be financially protected. If the package includes a flight it will be protected under the ATOL scheme of financial protection operated by the CAA. If the package does not include a flight, such as a coach, rail or cruise holiday, it must also be protected under the law but this will be by a bond held with ABTA for example or through a trust account or insurance.

A package holiday protected by ABTA provides exactly the same protection as ATOL, if the package provider goes bust you will be able to make a claim for a full refund or arrangements will be made for your repatriation. If you use a travel agent to book your package your protection does not change.

When buying flights and accommodation separately you run the risk of this not being financially protected. Neither flights bought directly from an airline nor accommodation are required to be protected by law.

When you purchase only accommodation or a flight through a travel agent (either in person or via the web) you should ask about the protection in place for all elements you are booking. A reputable agent will be able to advise you of the financial protection in place and help arrange insurance if needed. We would also advise that you book by credit card or VISA debit for maximum protection.

In the unlikely event of something going wrong with your holiday, if you have booked with an ABTA travel company, you will be able to use our independent and cost-effective complaints handling service to resolve any disputes or compensation claims.

Holiday financial protection is currently too complicated and confusing, and we are working closely with the Government to improve it so that it becomes more transparent for everyone.

For more information see abta.com

Gillian Edwards, Senior PR Manager, ABTA

Hello Senior PR Manager for ABTA
Your post is full of misinformation.

You say that "A package holiday protected by ABTA provides exactly the same protection as ATOL." That is entirely untrue. I'm sure the CAA will enjoy reading your post.

In fact ATBA cause the confusion by misleading posts such as the one you have just made.

People who want more information should read the full article below which followed a Which? Magazine published report;
"ABTA have previously failed to warn customers that members no longer financially protect the customer, not only misleading the press, but also their own agents and consequently the customers of those agents. It is not actually the agents fault as it is ABTA who will not admit to the public they no longer protect so the consequence is that this is not clarified for the agent." Posted Sep 2011 online via www.travelmole.com www.travelmole.com/news_feature.php?news_id=1149604

Read the Which? Magazine article in full online www.which.co.uk/money/insurance/guides/holiday-protection/protect-yourself/

Let's clear up some of your points.

1. A package holiday is protected by ATOL not ABTA.
   www.caa.co.uk - Direct from the CAA website
   Do other organisations like ABTA provide the same protection as ATOL? No they don?t.

2. Since 2006 when ABTA withdrew their financial protection, all other types of travel arrangements booked through ABTA agents are not financially protected. Only if the ABTA agent admits to you it's not an ATOL protected package holiday and then offers to sell you some sort of additional insurance, will you have any protection.

3. ABTA's own website tells customers who have not booked an ATOL protected package holiday, to contact their credit card company when things go wrong.

CAA = the Civil Aviation Authority (CAA)

To twitter.

Hmmm...interesting reading.