The Air Travel Trust Fund’s notice yesterday advising travel companies to make sure their Atol documentation is in order was not unexpected.
Bluntly, the sales documentation issued by many travel businesses is abysmal. This was highlighted particularly in the failures of Globespan and Goldtrail last year.
In this latest notice the ATTF spells out that it will not pay any consumer claim where an agent has not issued a correct Atol receipt in accordance with the CAA’s Official Record Series 3 Guidance – highlighted at the end of the press release under “notes to editors”.
This is not rocket science, but it is amazing how many companies do not follow these simple guidelines. Why?
Firstly, this industry is broadly driven by sales and marketing and IT motivators. I have often carried out a compliance review of paperwork for a company and established the correct documentation with their management team only to revisit a year later and find it has disintegrated.
Invariably the explanation is that the sales people didn’t like the layout or the transparency of pricing (the commission/booking fees/mark up etc).
Alternatively they indicate that their IT departments or IT solutions providers don’t like the requirements or have simply changed the format and not followed the advice given.
It never becomes a huge issue until the CAA or Abta come calling, or a tour operator for whom the business acts as an agent fails.
The second problem is that agents do not like to put customers into direct contact with the principals. If the customer has a clear Atol receipt and the corresponding Atol holder’s confirmation invoice then they may end up concluding that there is a saving to be had by booking direct.
Given recent events, I cannot see that the ATTF has any other option than to issue this notice. However, it does raise huge contradictions.
The advice issued yesterday speaks of concern about lack of clarity for consumers. However, there is every chance that a consumer’s claim will be rejected not because of confusion on their part but because of tardiness or an administrative error on the part of their travel agent.
If a customers finds they have no claim because of an incorrectly issued Atol receipt, will they have a legal case against the agent who issued it? If so, this could redefine the risk profile of the whole agency sector.
After the failure of Goldtrail the CAA was looking for technicalities that enabled it to reject claims for compensation, particularly those originating from the large online retailers. It was thinking in terms of travel agents making a claim, not consumers. As such this notice takes us a step further away from full consumer protection.
I often say that the CAA Consumer Protection Group should be renamed the ATTF Protection Group. This is another step in the ‘protect the ATTF at all costs’ attitude that pervades every aspect of consumer protection.
True Atol reform would give us a regulator who warmly embraces consumer claims, whereas the current regulator finds every possible way to palm the cost off onto someone else – trade associations, credit card companies and now agents.
If you look at the detail of the notice, it highlights the problems that arise where agents “mark up”. Flight only operators (and cruise operators) pay a pittance of commission – how can you sell the product and make such low commission as an agent?
You can’t. You have to add a booking fee, credit card charge or whatever to make a turn, and often Atol receipts are not clear on this. The ATTF will only reimburse the customer the gross operator price and not any add-ons.
Chris Photi, partner, White Hart Associates