ABTA demands clarity on ‘foggy’ law

ABTA has criticised the Financial Services Authority for failing to clarify its position over the sale of car hire insurance by travel agents.

Since January 2004, agents have been allowed to sell collision damage waiver insurance but it is unclear if agents need to be regulated by the FSA for the sale of liability insurance.

Head of finance Mike Monk said the grey area for agents was compounded by the fact the FSA has refused to clarify its position despite repeated calls from ABTA.

“It has caused so much confusion because talking to the FSA is so difficult. I get more sense talking to my dog than to the FSA,” he said.

“The conversations are so bizarre, and I have a letter from the FSA saying it is not prepared to explain what it means.

“The FSA tells me car hire isn’t travel, instead it’s a means of travel. I wish I could give our members definitive advice.

“It’s difficult because our members will have to refrain themselves,” he added. “They cannot help the customer fill the forms in or give any advice.”

Monk said agents should avoid any conversation with clients about car hire insurance, despite this meaning they are accepting payment without being able to guarantee the car hire company will accept them in resort.

Avis head of leisure sales Julia Kemp said although the law was “foggy”, agents were safe to sell insurance when part of an all-inclusive car hire package.

ASB Law partner and former FSA lawyer Richard Mumford said the FSA refuses to clarify its position “because it doesn’t understand it”.

An FSA spokesman admitted the regulations are “slightly odd” but claimed it is not its remit to clarify the laws.

“What we cannot do is act as a legal advisor to ABTA,” he said. “It’s not for us to pre-judge the courts.”