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Comment: The government’s PTR review falls short

Fox Williams’ Rhys Griffiths says too much focus of the ‘mini review’ is on peripheral issues

Government plans to amend the Package Travel Regulations (PTRs) following a consultation with industry stakeholders last year amount to a mini review and not the root-and-branch review some in the sector have called for.

The government decided to focus on what can only be described as peripheral issues. The changes, laid out in the ‘Reforming Competition and Consumer Policy’ paper published by the Department for Business (BEIS) in April, amount to the following:

  • The definition of a Linked Travel Arrangement (LTA) will be simplified to address concerns that LTAs are confusing and rarely used in practice.
  • BEIS will clarify when an “other tourist service” forms a package or an LTA when combined with transport, accommodation or car hire. For example, when a customer books a hotel and a theatre trip in a single booking, there is scope for differing interpretations as to whether this is a package.
  • It plans to improve the flexibility of insolvency protection provisions in the PTRs, in recognition of the difficulties that sometimes exist in sourcing insolvency protection (eg a bond). We suspect this will allow a greater element of ‘mix and match’ so package organisers can use multiple methods to protect customer monies.
  • BEIS will be given powers to make changes to the horribly complex information forms that must be provided to customers before they book. It will also publish a consumer-facing guidance document explaining the PTRs.

It is a shame the government has not taken the opportunity to give the travel industry and consumers the ‘Brexit dividend’ promised by tackling more‑important and difficult areas of the PTRs where reform is needed. This is what the EU has decided to do with its root-and-branch review of the Package Travel Directive.

Associated areas of focus

BEIS also proposes to address other areas of consumer protection that could touch on travel to varying degrees. These include:

Subscription contracts: The use of subscription contracts is in its infancy in the industry, but some see the benefits of offering special deals and discounts in return for a regular payment. The government sees the benefits of this model to the consumer, but plans new laws to address practices it considers to be undesirable. The new rules will require companies to:

  • Provide clearer information to consumers before they enter into a subscription contract.
  • Send a reminder to customers before a subscription automatically renews and an introductory offer comes to an end.
  • Ensure customers have an easy mechanism for exiting a subscription contract.

Fake reviews: An honest and impartial review from a customer who has used a travel service has a powerful influence on other consumers. The government is keen to ensure this important resource is not corrupted by fake reviews. It intends to outlaw the following:

  • Commissioning or incentivising fake reviews.
  • Hosting consumer reviews without checking they are genuine.
  • Offering to submit fake reviews.

Holiday savings clubs: There have been examples in the recent past of consumers losing their savings when a Christmas savings club becomes insolvent, and no insolvency protection exists in these circumstances. The government intends to address this with new laws to ensure consumer payments to savings schemes must be protected by a trust account or financial failure insurance.

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