Consumer champion Which? has claimed refund credit notes could require legal authorisation before a cash refund can be paid out in cases where the holiday provider has gone bust.
The company also said there was no guarantee that consumers in this situation with outstanding RCNs would get their money back, even after paying for a signature from a solicitor.
More: Analysis: Refunds, Which? and Shearings
Which? said it had learned of the issue following the collapse of Shearings’ parent company Specialist Leisure Group in May.
According to Which? Shearings’ customers with outstanding RCNs have been sent an Atol claim form, part of which has to be witnessed by a solicitor, notary public, other Commission for Oaths, or Officer of a Court, as well as stamped with an official seal before they can be processed.
But the Civil Aviation Authority said a declaration form was unlikely to be needed in the ‘vast majority of cases’ relating to the collapse of Shearings.
According to the CAA, consumers may be asked to sign a declaration form, witnessed by a solicitor, when it processes an Atol claim form relating to a RCN after a company has gone into administration in order to prevent fraud and ensure the right amount of money is paid to the right person.
A spokesman for the CAA stressed this was likely to be ‘very rare’.
He added: “Consumers that have been promised but have not yet received a refund for a cancelled Atol protected booking are able to submit a claim in the event that their Atol holder ceases trading. This is one of the ways the Atol scheme helps to protect consumers from losing money.
“When processing this kind of claim, to prevent fraud and make sure we pay the right amount of money to the right people, we may ask consumers to sign a declaration form, witnessed by a solicitor. In the case of Shearings Holidays, it is unlikely that we will require this declaration from the vast majority of consumers.”
Which? contacted 10 solicitors firms and a notary public as part of its investigation into the issue. Five were unable to help as they were closed and a sixth was uncontactable. Of the remaining four, two said the cost for this service would be £5 per document, one quoted £20 and another £40. A notary public gave three different quotes for the same service, from £50 up to £120.
The official fee stated in the Commissioners for Oaths (fees) Order is £5, but not all firms are bound by the Order.
Despite Abta’s reassurances that RCNs are financially protected if the holiday company fails, Which? said it would continue to urge holidaymakers not to accept them as there had not been any clarification from government on the issue.
It is encouraging consumers to push for a cash refund or rebook for an alternative date. It is also urging consumers who have accepted a RCN but were not aware of the need for a solicitor’s signature for a fee if the holiday firm goes bust, to ask to exchange the RCN for a cash refund on the basis the terms were not fully and fairly disclosed at the time.
Editor of Which? Rory Boland said: “These time-consuming and sometimes expensive forms are just another obstacle being placed in the way of holidaymakers who are desperately trying to recoup money lost on cancelled package holidays – some who have been waiting months for their money back, and others who have been left thousands of pounds out of pocket.”
The news will come as a further blow to the trade which has already come under heavy consumer criticism for issuing RCNs, which pledge to refund consumer monies but not within the 14 days required under the Package Travel Regulations.
More: Analysis: Refunds, Which? and Shearings
