The administrator of failed Turkey specialist Goldtrail Holidays has performed a u-turn on advice to travel agents which told them to reimburse customers for holidays not yet taken.
In a section on a special website set up to offer consumers and the trade advice administrator Begbies Traynor had said:
“If you have received monies from a customer in lieu of a Goldtrail Limited booking to take place after 16th July 2010 but have not yet forwarded the money on to Goldtrail Travel Limited, you should refer back to the customer. Do not pass the monies on to Goldtrail Travel Limited – in administration.”
Travel Weekly contacted Begbies Traynor to ask about the advice after experts pointed out it was wrong. The message was subsequently changed.
The page on the website now says: “These monies are rightly due and payable to Goldtrail Travel Limited – in Administration and will be pursued by the Administrators if not paid under the standard terms of contract between you and Goldtrail Limited.”
Experts told Travel Weekly the original advice was contrary to agency law, and would have left the administrator without money that rightly belonged to Goldtrail to settle debts the company had.
This might have left overseas airlines, hoteliers and other creditors that might expect to recoup some debts out of pocket, while customers would have been reimbursed, saving them the trouble of claiming through the Atol scheme.
A Begbies Traynor spokeswoman said: “The text you have referred to on the Goldtrail website has now been removed, for the latest information on refunds customers should refer to the CAA website.”
A spokesman for the Civil Aviation Authority said the authority was now happy the correct advice was being issued: “We want customers to understand the process of securing a refund. Unfortunately travel agents were given the wrong advice. We are confident most agents and operators are fully aware of what their obligations are.”
Alan Bowen, legal advisor to the Association of Atol Companies, said the fact that the inaccuracy had been pointed out to the administrators on Wednesday.
He said many agents were happy with the original advice because reimbursing customers with Goldtrail money was preferable to paying out of their own pocket and claiming it back from the CAA, or leaving their customers to claim through the Atol scheme.
But he said other agents would have been “squirming this week” because they were selling Goldtrail flights without issuing the proper Atol invoicing, so as not to reveal the mark up they were selling them at. Agents were apparently being paid just 0.5% commission to sell Goldtrail seats.
“If you were buying a flight from Goldtrail, whether retail or Atol to Atol, you had 0.5% commission so you could not sell it for the price you were buying it at,” Bowen said.
The Co-operative Travel, thought to be Goldtrail’s largest customer, was the only retailer to successfully challenge the operator’s move to change all invoices with trade partners so that business was being done on an Atol to Atol basis, according to Bowen.
This placed the onus on the agent to financially protect the customer and Bowen said the collapse once again highlighted the pitfalls of agents acting as tour operators.
He said many agents, although unhappy with the way Goldtrail operated, continued to sell it despite the added risk because it had “cornered the market in cheap and nasty holidays to Turkey”.
Bowen claimed Goldtrail was paying £1 a night for bed and breakfast and £12.50 for all inclusive. “But the consumers kept coming back and travel agents kept selling them,” he added.