Travel association ABTA could demand its members offer consumer financial protection on every purchase.

ABTA head of financial services Simon Bunce and board member Steven Freudmann confirmed the association is considering making consumer protection a condition of membership.

However, travel company Teletext Holidays called for the ATOL protection scheme overseen by the Civil Aviation Authority to be scrapped. Teletext only recently became an ATOL holder.

Speaking at a World Travel Market seminar on whether the ATOL scheme can survive, all three agreed the system is confusing the industry and consumers.

Sales of package holidays are covered by ATOL protection, but scheduled airline flights and independently packaged holidays lie outside the system, with some retailers offering comprehensive protection through alternative schemes such as trust funds or failure insurance.

Bunce said: “We could make it compulsory for ABTA members to offer financial protection. It is something our board is discussing.”

However, Freudmann argued: “It would disadvantage our members if we made protection compulsory.”

He said ABTA would continue to lobby ministers to extend the ATOL system to scheduled carriers. “We believe there is mileage in lobbying the government, arguing for universal protection for travellers,” he said.

On Holiday Group chief executive Steve Endacott insisted: “It is taking too long. I am fed up of hearing about extension of the ATOL scheme and nothing happens.”

Teletext Holidays managing director Matt Cheevers simply called for ATOL protection to be scrapped. “The industry does not understand what is covered. Cover the lot or scrap it and let insurers pick up protection.”

Having applied for an ATOL this year, Cheevers said: “The process is a joke.”

New ATOL holders have to provide a bond in case of failure and Cheevers complained: “The bond market is incredibly difficult and expensive.”

Endacott argued: “Companies have to offer consumers something. ABTA should make it compulsory to offer financial protection.”

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