Around 200 overseas holidaymakers and 10,000 forward bookings have been affected by the collapse of Freedom Direct.
RMT has been apointed the provisional liquidator of the online and call centre retailer and tour operatorand is dealing with the failure, which was confirmed on Thursday. RMT is planning a creditors meeting on May 5.
Freedom Direct traded under the following online brands:
- freedomdirect.co.uk
- freedom-direct.co.uk
- snowdeals.co.uk
- holidaysyoulike.co.uk
It sold air packages to the Mediterranean, the Canaries and Turkey, as well as medium and long-haul destinations. The company’s 106 employees have all lost their jobs as a result of the failure.
RMT said monies paid by customers are protected, but added: “The company’s financial position is still being reviewed and full information will be presented at the meeting of creditors.”
The company’s £750,000 bond was pulled by the Civil Aviation Authority on Thursday, April 16. It failed to renew its ATOL licence on March 31 and had traded without it for 16 days. The company did not need an ATOL to sell non-flight products such as cruises.
It is understood the Air Travel Trust Fund could face a pay-out of up to £2 million as a result of the failure, but the CAA would not confirm the figure at this stage.
A CAA spokesman said the CAA was now investigating how many Freedom Direct’s holidaymakers were ATOL protected. He said: “We understand that there are 200 people overseas at the moment and up to 10,000 pre-bookings. What we do not know is how many are ATOL protected and how many booked direct with airlines, for example.”
The CAA said Freedom Direct would have enjoyed a ‘period of grace’ of ATOL protection for around three months. “If a company does not renew its ATOL it would have a period of grace where we would still continue to hold a bond and customers would be ATOL protected,” said the spokesman.
Customers in resort
Holidaymakers currently on holiday should be able to complete their holiday and fly home as planned, the CAA said, although a spokesman admitted some could have to re-pay part of their holiday and re-arrange their return to the UK before making a claim. It has set up helplines for holidaymakers on how to lodge a claim.
“In theory there might be people who have to change hotel and could claim money back depending on the booking. Some travelling in the next few days may need to ring their hotel or airline to confirm the booking,” he added.
The telephone number for customers currently on holiday is 0207453 6477 or 0207453 6394. See the CAA’s Freedom Direct page for more details of how to claim.
Advance bookings
Advance bookings have been cancelled and holidaymakers, including those who have paid with a credit card, are being urged to lodge a claim with the CAA for consideration under the ATOL scheme via the website atol.org.uk.
Those with confirmed scheduled flight bookings as part of their package may still be able to use these flights, although accommodation and transfers may now not be available as a result of Freedom Direct’s collapse. Bookings made direct on credit or debit cards with airlines by holidaymakers will not be covered by the ATOL scheme.
Holidaymakers who have booked flight-only with Freedom Direct should be able to travel as planned but are advised to contact their airline. Those who booked accommodation-only with a named supplier should contact the supplier or ABTA.
For any package holiday bookings made through Freedom Direct with another tour operator, customers should contact the tour operator direct or ABTA to see if the booking will be honoured. ABTA is contactable on ABTAclaims@cegagroup.com or contact ABTA’s claims partner CEGA on 01243 621500.
More on 2009 ATOL renewals
- CAA denies changing ATOL renewal criteria
- ATOL renewal ‘bloodbath’ averted
- Agents and operators pull ATOLs