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Coronavirus: Credit notes come with full protection, assures Abta boss

Abta has given assurances that credit notes agents and operators are offering customers for cancelled holidays are financially protected.

Speaking in a video interview with Travel Weekly editor in chief Lucy Huxley yesterday, association chief executive Mark Tanzer said it was vital this message was sent out to protect companies.

And he warned if firms are forced to abide by the 14-day EU Package Travel Regulations refund rule many will simply go out of business leaving customers in a much worse position.



Abta is lobbying the UK government and European Commission to temporarily extend the refund period to four months to give firms breathing space to survive the COVID-19 crisis.

Tanzer said the UK travel sector is not alone in calling for a change in the rules, with France and Belgium also calling for regulatory forbearance as the shutdown of travel hits company finances.

Tanzer said: “This is not an easy place to be for Abta between customers who want their money now and companies who don’t have the ability to deliver it in 14 days.

“We are acting to deal with those customers to give them confidence that refund credits will get their money back or give them another booking.”

Agents have expressed concern about a lack of clarity about how credit vouchers work and whether they can recommend their clients accept them.

But Tanzer said: “What we have been arguing, because of these extraordinary circumstances, to buy us some time, is to extend the refund period to the end of July.

“This does change the customers’ right. They still have a right to a cash refund or a new holiday.

“What they will be given is a refund credit because the cash can’t be given within 14 days because of the scale of cancellations and also because companies are trying to get money back from suppliers.

“It’s a very unusual and difficult situation because we completely understand why customers want to money now. We are taking hundreds of calls as I am sure members are.

“We are trying to balance that with keeping companies going so when we come out of this there’ll be jobs and companies so we can pick up again.”

Tanzer described this approach as “pragmatic” saying an alternative situation in which the travel sector sees wholesale failures would leave customers far less likely to get their money back.

“The reality is that, whatever happens, customers aren’t going to get rapid refunds in these situations because the companies don’t have the cash at the moment.

“If we have company failures you fall back on the Atol scheme or Abta and for us to be able to provide refunds will take a long time because we could be dealing with a lot of failures.

“So, it’s in the customers’ interest, as well as in the companies’ interests, for this change to go through. This is pragmatic approach to an unprecedented set of circumstances.”

Abta has set out a series of demands to government in an open letter which it has encouraged its members to download and send to their local MPs.

Tanzer said changing the law is technical and complicated and Abta has had to address accusations that the move is a “back door bailout” by consumer group Which?.

“People have presented this as the taking away of a consumer right to a refund, which it isn’t. We have been explaining to politicians that this is an extension under which that right is exerciseable.

“If they don’t do this and there are company failures consumers won’t be in any better position than under our proposal.”

Tanzer said if credit note vouchers accord with guidance it has set out holidays booked are protected either by the Atol scheme, where a flight is included, or Abta, for a limited set of non-flight bookings.

Following the interview Abta provided the following clarification: “It’s important to note these aren’t vouchers for general use in the traditional use of the word which don’t have protection.

“They’re a very specific refund credit note, which is a credit note for the original holiday booking only, to be redeemed either for a cash refund or the holiday booking.”

Tanzer said: “The reality is some companies are already offering refund credits and come customers are accepting those and  the fact that you can say those are already protected by Abta or the Atol scheme is a real comfort to people.

“If companies are obliged to provide cash refunds then there will be failures. They are not getting cash in and they are being obliged to push cash out so there is a scenario under which you could see many companies struggling.”

“Where they are being given we are giving advice on the fact that they are protected. They are linked to the original booking so it’s a deferred refund on the original booking. These are not the same as vouchers. Those are not protected. These are very clearly refund credits.”

Further guidance is available on an Abta coronavirus Q&A on www.abta.com.

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