Government announce ATOL reform
04.02.11
A major overhaul of the ATOL protection scheme has been announced by the Department for Transport, Travelmole reports. Under a new flight-plus scheme, travel agents will find it difficult to sell a ‘dynamic package’ without having ATOL protection. They will also have to put all income from ‘flight-plus’ sales into a trust account until clients have completed their holiday, which will hit cash flow and could be devastating for many agents.
Aviation Minister Theresa Villiers told Parliament the Government plans by the end of the year to:
- Extend protection to include 'flight plus' holidays. This would cover trips including a flight where the various elements are purchased within a specified short period - essentially looking like a package holiday but falling outside the existing legal definition.
- Deter businesses from misleading consumers about their level of protection. Some companies offer holidays that might look like packages but make the transaction as an ‘agent for the customer’ without explaining to the customer that this means forfeiting ATOL protection. These proposals are designed to provide customers with a clear and honest explanation so they can make informed decisions.
- Replace the wide variety of documents that companies currently issue with standardised information for travellers, making it clear when their trip is ATOL protected.
In a statement, Ms Villiers added: ‘Insolvencies in recent years have shown us how important it is that customers are able to buy protected holidays, but recent court cases have only served to highlight the fact that the scheme is in need of reform. These changes will remove much of the confusion surrounding ATOL, while ensuring operators who offer such holidays provide customers with the financial protection they expect.'
‘As well as improving protection for passengers, these reforms will help us put ATTF finances back on track so that taxpayers' exposure to the fund’s deficit is rapidly reduced and ultimately eliminated. I also believe there may be a case for new primary legislation to address other issues in the ATOL scheme and I will be considering this further in the course of the year.’
ABTA said the reform was flawed because it excluded airline and website click-through sales from the scheme. ‘These exclusions will perpetuate confusion among consumers,’ it said.
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