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Protect Holidaymakers From Fraudsters And Failed Travel Firms

The Trading Standards Institute (TSI) today demands urgent action to protect holidaymakers from losing out when travel companies and airlines go bust or disappear.

Millions of people will book holidays abroad next year - and many will be unaware they have no financial protection if disaster strikes, the TSI warns during National Consumer Week (November 20-24).

'The laws and regulations designed to protect holidaymakers are now outdated and woefully inadequate,' said TSI's lead officer for holidays and travel, Bruce Treloar.

'The way people book their holidays these days has changed dramatically, particularly with the rise of the Internet and the use of budget airlines.

'However, the laws have not kept pace with this change. They do not adequately protect consumers if they fall foul of disreputable companies or if companies go bust.

'Nor are consumers clear about what risks they are taking with their money or about which companies they can trust.

'The whole situation is a real mess and we urgently need the Government and the industry to sort it out before the big holiday booking season kicks in after Christmas.'

Ron Gainsford, the TSI's chief executive, said: 'The situation for consumers is confusing and getting worse.

'We have always advised consumers to use reputable, ABTA member travel agents as their money would be guaranteed from the moment they handed over a deposit.

'We continue to encourage consumers in this added value direction although we are disappointed to see the ABTA Code withdrawn from the Office of Fair Trading (OFT) Approved Codes Scheme. This cannot be helpful to either party, to consumers or the industry. We urge ABTA and the OFT to double their efforts to see the ABTA Code in a form that can enjoy OFT approval and support once again.

'The ABTA code now no longer provides the gold plated guarantee consumers used to rely on. The onus now is on the consumer to carefully check all their documents and ask for advice if not clear.'

The TSI recommends the following urgent action plan:

An independent emergency fund should be created to assist passengers adversely affected by companies going bust or defrauding them. Each passenger would be asked to make a small contribution (e.g. a £1 'levy') to the fund at the point of purchase.
All airlines would then be legally bound to guarantee all advance payments for flights bought in the UK, but if not, should be forced to make it clear to consumers their money will be at risk.
All travel companies selling holidays and flights in the UK would also be covered and if not, should be statutorily obliged to state clearly on websites, in brochures and other materials whether or not protection is in place in the event of their failure.
ABTA and the OFT should work to ensure the ABTA code regains OFT Approved Code status.
In the meantime, holidaymakers are urged to seek out travel booking advice before handing over money by visiting www.consumerdirect.gov.uk

Consumer Direct - telephone 08454 04 05 06 - is the Government-funded national telephone and online consumer advice service that works in partnership with Local Authority Trading Standards Services to help consumers.

In 2005 the TSI highlighted its concerns when it published the results of a three year study into so-called DIY, self-packaging holidays.

The study, called 'A Risk Too Far?' predicted that more and more consumers would suffer unless the Government acted quickly to plug the gap in existing laws.

For more information contact the TSI press office on 0870 872 9030.

Information for Consumers:

How safe is your holiday booking?

If you book a traditional package holiday from a tour operator (usually a flight and hotel) your money is PROTECTED and, if the hotel fails to meet realistic expectations, you will be assisted under the Package Travel Regulations.

If you book your holiday by purchasing different elements (flights, accommodation, days out, car hire) from various companies, the level of financial protection you have is dramatically downgraded depending on the circumstances, as follows:

If you book elements of your holiday with an ABTA travel agent you no longer have the gold plated guarantee you used to have and in some cases your money will be UNPROTECTED. The onus is on the consumer to carefully check all documents and ask for advice if not clear.
If you book a flight with a scheduled or budget airline, or decide to book your own hotel on the Internet, your money will be UNPROTECTED and, if you encounter problems, you will have to take legal action abroad.
If you pay by credit card for individual items costing more than £100 each your credit provider accepts joint liability if the company collapses or runs off with the money. You are usually PROTECTED.
If you pay by cheque or debit card your bank may consider refunding your money but there is no guarantee it will do so. You are UNPROTECTED.
For detailed advice about the protection available to independent travellers, visit www.consumerdirect.gov.uk or call 08454 04 05 06 to speak to a consumer advisor.

This summer, thousands of people were affected by the activities of a group of online travel companies who are now at the centre of a major court case.

Four people are facing charges of conspiracy to defraud in connection with the case. Many of the consumers involved were left without a holiday and without their money. The cases are expected to be dealt with next year.

The TSI has previously lobbied the All-Party Parliamentary Committee for changes to the existing laws on air travel protection and has supplied evidence to the Department of Transport about its research.

About National Consumer Week 2006

NCW 2006 is themed 'Hey Big Spender!' and focuses on the problems, pitfalls and best practice for consumers when they make major purchases, including homes, cars, holidays, furniture and audio-visual equipment.

National Consumer Week, which has been running for 17 years, provides a platform to inform and educate consumers; to support fair traders; and to lobby businesses, trade organisations and the Government to improve the service to consumers.

The Trading Standards Institute (TSI) coordinates the week, supported by local authority trading standards services. This year Consumer Direct, the government's national telephone and online consumer advice service, is our partner.

Please call or email the TSI press office on 0870 872 9030 or at pressoffice@tsi.org.uk to indicate your news organisation's requirements in respect of National Consumer Week.

Consumer Direct can be accessed at www.consumerdirect.gov.uk

© 2008 itsa Ltd on behalf of the Trading Standards Institute.