Abta has defended its guidance on Refund Credit Notes in response to calls from ATD Travel Services founder Oliver Brendon to reconsider its position.
In a letter to Abta chief executive Mark Tanzer, Brendon said the association risked causing “irreparable damage” to its brand and the industry by “calling for an extension of the regulatory window until March 31, 2021”.
However, Abta insisted it had been clear that members must pay refunds “without undue delay” when requested, and its guidance did not mean that refunds due now should be withheld until that date.
Abta has encouraged the use of Refund Credit Notes, which allow customers to rebook their holiday while retaining protection if they accept them. The association initially said RCNs would be protected until July 31, but then issued updated guidance with expiry dates based on companies’ financial protection periods. For those that bonded in March, the expiry date is March 31, 2021.
In his letter, Brendon (pictured) said he was “becoming increasingly uncomfortable” with ATD’s membership of Abta and “concerned the reputation of my own business is now being damaged”.
“Your organisation is demonstrating complete contempt for consumers which is – I fear – going to do irreparable damage to your brand and indeed the industry that we all love,” he said.
“You are campaigning for an extension of the regulatory window until March 31, 2021. Why March 31? Why do viable, well run travel companies require a year to get refunds from suppliers or find other means of giving customers their money back?”
Brendon said many larger Abta members were backed by private equity and questioned whether firms had exhausted “all other means” to raise money to pay refunds.
He also said Abta should focus its efforts on lobbying airlines to refund and, while acknowledging that some smaller members needed to recoup money from suppliers to process refunds, argued that July 31 was ample time to achieve this.
In response, Abta said: “There is a lot of debate about what an acceptable and workable timeframe is for providing a refund in the current crisis. The government needs to come up with a plan where the customer interests are protected first and foremost, as in so doing the industry will benefit from greater customer confidence.
“It also needs to be a system that the majority of companies can deliver, because if they can’t that isn’t in the customer interest either. Today, some companies are setting out shorter windows than others, based on their cashflow and financial protection arrangements. Having a deadline that falls in the middle of the summer season will put us back in the same situation for cancellations that are yet to occur, if the travel restrictions remain in place.
“Abta makes absolutely clear companies should pay customers as soon as they are able to, regardless of the expiry date on a refund credit. It would make much more sense for customer and industry confidence for the government to outline a clear plan.”
Abta set out its code of conduct for travel agent and tour operator members in relation to refunds and Refund Credit Notes, and said it did not consider payment of refunds in March 2021 for refunds due now as being “without due delay”:
- Their policy must be to pay refunds without undue delay where the customer does not want to accept a RCN and to pay refunds without undue delay where the customer has accepted a RCN and then changes their mind.
- The time scale of ‘without undue delay’ will depend on the specific circumstances of each member but the customer should be given an indication of what that would be and a justification for it.
- If they have an end date of 31 March 2021 on their RCN that is the last date by which all refunds must have been paid. It is not the date at which refunds will be paid.
- We would not consider 31 March for refunds due now as being without undue delay.