The Association of Atol Companies has warned of its concerns over moves that could see firms opt under which European jurisdiction they offer financial protection.
The concerns come after a survey of its members found 80% were opposed to the change that could come in under reform of Europe’s rules on package travel.
Under a European Commission proposal the rules that govern the selling of packages will be standardised across Europe to allow greater freedom of trade.
This raises the prospect of firms based overseas trading in the UK under the rules in place in their country of origin.
The Low Cost Holiday Group has already taken advantage of this having moved its operations to Majorca in November so that it now operates under Spanish package rules.
This prompted the CAA to express serious concerns over the move and to later clarify that anyone bookings taken after November 1 would not enjoy Atol cover.
Today the AAC described the prospect that tour operators and suppliers could choose the venue of financial protection under a new Package Travel Directive as a “total nightmare”.
It said this could see consumers faced with a myriad of unfamiliar schemes from the 28 existing members of the EU.
Lindsay Ingram, Chairman of the AAC, said: “We have worked hard to ensure better consumer protection.
“Our members issue Atol Certificates in all appropriate cases, a simple and clear explanation of what is, and is not, protected.
“The UK Atol system provides protection in cases where EU law is far from clear and consumers may find themselves unprotected when buying similar products from non Atol holding businesses, either based here or abroad.”
Alan Bowen, legal adviser to the AAC, added: “Major changes to the Atol scheme in 2012 extended financial protection to customers who chose to buy flights and accommodation or car hire as separate items.
“No other country extends protection beyond traditional package holidays as defined more than 20 years ago and UK consumers need to be aware that without an Atol protected purchase, customers may be on their own.
“The sheer issue of dealing with language problems if protection is based overseas may be insurmountable and cause greater stress in the event of a business failure.
“We strongly urge customers to check the protection that may exist before booking. Finding out afterwards that your purchase is not Atol protected is too late.”