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AAC warns of Atol reform’s ‘hidden dangers’

The Association of Atol Companies has issuing a stern warning over “hidden dangers” within planned government changes to the Atol financial protection scheme.

The AAC claims that hundreds of thousands of customers could lose protection when the rules change on January 1, 2012.

It highlighted concerns in the proposed changes two weeks before the deadline for consultation on the reforms by the Department for Transport.

Of greatest concern to the AAC is a plan to withdraw protection for refunds to those yet to travel if the only purchase made is a flight.

The trade body’s legal advisor Alan Bowen said: “Hundreds of thousands who might be visiting friends or relatives or travelling to their own accommodation abroad, stand to lose valuable protection, because despite the fact that they are only booking a flight, they will still be charged the usual £2.50 Atol Contribution fee.

“These proposals risk the whole Atol scheme losing credibility when some Atol sales will still offer refunds and repatriation and others won’t.

“At present it seems most travel agents and customers have failed to recognise the danger ahead and we urge all those affected to contact their local MP and respond to the consultation.”

For over 30 years customers booking a flight, whether chartered or scheduled, from an Atol holding company could be certain to receive a refund if the company ceased trading before the travel began.

AAC chairman David Mortimer said: “Within the last 14 days 50,000 people who booked with Holidays 4U have seen how important that right is, and their story was replicated in 2008 with the collapse of XL and last year with the failure of Goldtrail when over 140,000 passengers claimed refunds.

”The ramifications of these proposed changes could badly affect the viability of agents, which underlines the importance of everyone participating in the consultation process.”

The AAC is advising and assisting members who need guidance in wording their response to the consultation, which closes on September 15.

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