CAA and OFT discuss tougher enforcement of agency rules

Travel retailers which attempt to bypass the new Atol rules by declaring themselves an “agent of the customer” can expect tighter enforcement of existing consumer protection regulations.

Civil Aviation Authority (CAA) head of Atol licensing Andy Cohen said: “We are in discussions with the Department for Transport and Office of Fair Trading with a view to ensuring that when companies say they are ‘acting for the customer’, they make all information fully available in a format that is understood and can be clearly seen.”

Cohen said: “If companies sell like that, they are going to have to sell properly. Consumer Protection Regulations already exist and travel companies are obliged to meet them.”

Some retailers opt to act as an ‘agent for the consumer’ because they want the advantages of agency status and could otherwise be construed as acting as a principal. Being the principal in a transaction brings both legal liabilities and a requirement to pay VAT.

It is unclear how many companies are acting in this way rather than as the agents of travel suppliers. CAA consumer protection group deputy director David Moesli said: “Businesses will be mixing and matching [what they do] and the poor old consumer will be baffled.”

Moesli said that explaining a company’s agency status in its terms and conditions would be insufficient to satisfy regulators. “There will have to be something upfront at the sales end,” he said.

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