News

Abta ends hostility to trusts accounts

Abta is to end its previous opposition to trust accounts and could move quickly to offer trust arrangements of its own to members who fall within the revised Atol consumer-protection regulations.


Travel agency consortium Advantage will do the same, but move quicker by unveiling trust-account plans this year. The government unveiled proposals last week to create a new ‘flight-plus’ Atol to cover separate sales of a flight and accommodation or car hire, bringing travel retailers into the licensing scheme from next year.


Abta chairman John McEwan said: “Abta is going to begin work to assess the feasibility of putting trust arrangements in place. We are already committed to that.”


He told Travel Weekly: “We already have an electronic-payments system in place which will make it relatively straightforward.” McEwan confirmed that Advantage, of which he is also chief executive, would unveil plans of its own this spring. He said: “Advantage is also looking at trust arrangements.”


The regulatory changes will require agents who hold a flight-plus Atol to provide a financial guarantee, such as a bond, for four years or to make alternative arrangements such as paying customers’ money into a trust account.


McEwan said: “Trust accounts will play a bigger role [for agents] in future. But it is early days. Whatever we come up with at Abta, it would be a voluntary scheme available to all Abta members – an additional option for them.”


He added that Abta could benefit from the work already done by Advantage, which he described as “well down the track”. McEwan said: “Advantage will offer trust account arrangements under the scheme we are developing. The technical platform [for trust arrangements] will be in place by May or June.”


Abta and Advantage use the same technical platform for electronic payments and McEwan said: “The vast majority of Advantage members are in Abta. It would make sense for Abta and Advantage to work together.”


Abta has historically been opposed to a trust account-based model saying they are no guarantee that the money is safe. This has brought the association into regular conflict with rival organisations and retailers like the Travel Trust Association that operates trusts and claim they are watertight.


Abta is only likely to accept a proposal that ensures the money kept in a trust account is safeguarded from being used for any other purpose than securing customers’ payments.

Share article

View Comments

Jacobs Media Group is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.