The Air Travel Trust Fund (ATT) has written to Atol holders to set out details of the correct paperwork they must issue to their customers to ensure they protected.
The ATT said Atol failures in 2010 had highlighted that poor standards of documentation had led to “unacceptable and unnecessary delays” in refunds for holidaymakers.
The body has written to Atol holders to remind them of their legal obligation to provide documentation to holidaymakers either directly, or through their agent, setting out who is providing the Atol protection and its value.
The ATT has made some amendments to the payment policy, which will apply to all claims received as a result of Atol holder failures that occur on or after 1 May.
Agents are required to clearly disclose the price of the contract with the Atol-holder and give details of any mark-up or discounts separately. The customer must be aware that these do not form part of the contract with the Atol-holder.
The ATT said it would only pay claims where Atol holders had issued the customers with the correct documentation. If not, the client will be asked to contact their agent for a refund.
An ATT spokesman said: “The trustees want to refund customers as soon as possible after a failure, but we are increasingly finding that a considerable amount of time and effort is spent dealing with claims where documentation is either confusing, or in some cases fails to correctly identify the extent to which the customer was protected under Atol.
“These issues create complexity and delay for customers, since the trustees are bound to ensure that Trust money is spent only on claims where evidence of Atol protection is available.
“The statutory requirements relating to Atol receipts are intended to enable customers and the trustees to easily identify who is protecting the customer and the amount the customer should expect to be refunded if they have to make a claim.”
Abta welcomed the move. A spokesman said: “Tour operators and travel agents have a responsibility to ensure that they issue correct paperwork for all holiday bookings.
“Failures in recent years have highlighted the problems caused by incorrect paperwork which has led to delays in paying claims or claims being rejected. This is neither good for customers, nor tour operators and agents.”
This is the first action taken by the CAA since the government revealed its plans for Atol reform last month.
The CAA has begun discussions with the industry on the introduction of an Atol Certificate, which would be issued to everyone booking an air holiday, or flight, which is Atol protected.
The DfT wants to introduce this certificate in early 2012.
The CAA has commissioned Walter Merricks, former chief ombudsman at the Financial Ombudsman Service, to oversee a review of large Atol failure claims handling procedures.
This review aims to ensure that lessons were learned from the failure of the XL Leisure Group and will examine why customer claims took longer than anticipated to settle. The report will be published during April.