Abta is warning of “potential ramifications” if members’ agency agreements with tour operators are not up to date.
In the event of an Atol holder failure, the association claims the Civil Aviation Authority may not pay out holidaymakers’ refunds on trade bookings if the agency agreement is not correctly worded.
This could mean travel agents having to pay refunds back to customers after a tour operator failure, according to Abta.
The standard wording of agency agreements – introduced in 2012 – changed last year, but there are concerns members may not have updated agreements that were made prior to the 2013 changes.
In Abta Today, its newsletter to members, the association said the issue has come to the fore again partly because of the failure of Villa Parade parent Air Parade Ltd earlier this month, with debts of £6 million.
An Abta spokesman said: “We understand that some agency agreements issued by Villa Parade may not have been up to date and this may prevent claims being made under the Atol scheme. This highlights again the fact that agents must check all their agency agreements.”
The spokesman added that Abta had reiterated to agents on “several” occasions the importance of up to date agreements.
He said: “This is not just potentially an issue with Villa Parade claims; this could be for any Atol failure. Agents must make sure their agency agreements are properly worded in the way the CAA regards as acceptable.
“This could have potential ramifications; the CAA may not pay if agreements are not worded correctly. They could refer customers back to the agent.”
A CAA spokesman said: “We are currently in the process of collating information from travel agents who made bookings with Villa Parade. As part of this process we are asking for current agency agreements.
“As yet, no claims where customers booked via an agent have been fully assessed.”
Abta has produced a guide on the wording of agency agreements for agents. Visit the members’ zone on abta.com to find out more.