The Association of ATOL Companies has welcomed a letter from the Civil Aviation Authority reminding travel companies of their obligations to consumer protection.

The CAA has written to more than 100 travel companies which it believes may be continuing to sell air travel packages without the protection of an ATOL. From the beginning of April this year, ATOL holders began to charge a £1 levy on every package sold as part of a new government scheme, run by the CAA, to protect consumers against failing travel firms.

The letter informs companies they require a licence by law if they are selling packages.

CAA head of ATOL licensing Andy Cohen said: “The letter we are sending reminds other firms of the need to consider whether they are selling air packages. We are prepared to discuss their activities with them and give advice on ATOL requirements.”

AAC chairman David Mortimer said there had always been a small minority of travel firms operating without proper consumer protection, but welcomed the CAA’s move to try to end this practice.

“We’re pleased to see the CAA taking steps to ensure there is a level playing field,” Mortimer said. “Not only do ATOL holders have an extra cost, they also have to make financial statements to the CAA and show their business is well managed.”

Although the CAA’s letter is more of a reminder of legalduties than a threat, the CAA confirmed to Travel Weekly it would take legal action further down the line. It said it would look at taking possible proceedings during the summer as operating without an ATOL is a criminal offence.