ABTA’s bid to improve consumer protection for bed bank bookings has provoked opposition from within its own ranks amid fears some members could jump ship to rival associations.
The plan to force ABTA bed banks to take responsibility for clients’ money if an agent fails is being questioned by some agent members that rely on dynamic packaging sales. Bed banks have already criticised the move.
In a sign that some agents are disillusioned, the Travel Trust Association (TTA) claimed a marked increase in interest from ABTA agents.
Managing director Simon Hargreaves said: “Companies have been calling us since this story broke because, under our scheme, all bed bank bookings are protected.
“The number of applications to join TTA is higher than at any time in the past five years – with nearly 100 new members already admitted this year. We expect this to continue.”
The opposition follows threats by bed banks to review their ABTA membership and demand payment from agents eight weeks in advance rather than close to departure, a move agents said could leave them financially exposed. Some have gone as far as to question the worth of staying in ABTA.
Newcastle-based Holiday Discount Centre managing dir-ector Steve Campion argued that agents that are reliant on dynamic packaging sales may need new ways to protect customers’ money because of heightened concerns of a bed bank collapse.
His agency is considering creating a trust fund account to secure clients’ money.
“The earlier we pay any bed bank, the greater our level of exposure if one goes bust. We are comfortable handing over monies to an operator [in advance] because they are protected via their ATOL if they fail. If a bed bank fails, we will have to pay back customers because bed banks do not have ATOL protection.
“At the moment, we protect ourselves by delaying pay-ment to bed banks,” he said.
“Where is our protection? ABTA’s intention is correct, but we need to look at alternative ways of protecting customers,” he added.
Essex-based A1 Travel said ABTA was failing its agents. Managing director Chetan Patel said: “ABTA is not doing anything for us. The problem is that bed banks are not governed by any licence.
If we pay them eight weeks in advance, they still do not pay their suppliers until after the customer has travelled. What happens if the bed bank goes under? It would expose agents further. This is not the answer the industry needs.”
But ABTA chairman John McEwan insisted: “Agents dealing with bed banks can protect themselves and customers by selling suppliers that bond sales or protect them in other ways, or by protecting sales through insurance schemes. Agents should appreciate that this proposal adds further credibility to ABTA membership.”