Travel association ABTA has broadly welcomed draft guidance on the definition of a package holiday that will tighten controls on dynamically packaged sales.

Head of legal services Simon Bunce said: “People will understand this. It’s probably a helpful document, but it is not the finished article. We are concerned the Government is not consulting airlines, which are getting into the package business.”

The guidance, issued last week by the Department for Business, Enterprise and Regulatory Reform, formerly the DTI, says retailers will be required to spell out when holidays lack ATOL or equivalent cover (Travel Weekly, July 6).

That will mean explaining a client could lose their money if any of the firms involved in a non-package transaction goes bust and that the travel retailer will not be liable in the event of an accident abroad.

ABTA and the Civil Aviation Authority, which regulates consumer financial protection, say this will likely end use of the term ‘dynamic packaging’ for non-ATOL covered sales.

Companies that refer to a dynamic package will be selling a package under the law, with all the liabilities that brings.

“If travel agents sell more than one holiday element at a time, it will probably be a package,” said a senior source.

Agents may try to get around this by making a succession of sales with separate invoices. But even this may be ruled out. The guidance points out: “If the consumer thinks they have bought a package, it is likely to be a package.”

Formal guidance will be issued in the autumn after a six-week consultation. But the guidance is not expected to change a great deal. The source said: “The department would like the trade to agree, but it is not likely to accept any great changes.”

The CAA hopes to mount a consumer awareness campaign early next year.


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