Buy insurance to ease pain of cancellation fees, says Abta

Abta has reasserted calls for consumers to purchase travel insurance at the point of sale to avoid losing money if they cancel a holiday.

It follows reports that travel firms could be forced to abandon strict rules on non-refundable deposits following new guidelines by the Competitions and Markets Authority (CMA).

The Daily Telegraph accused Thomson Holidays, Viking Cruises and Imagine Cruises of “heartlessly” refusing refunds when holidaymakers became too ill to travel or died.

But this week Abta said there was “nothing wrong with cancellation fees” charged by operators. A spokesman said: “Abta’s advice for many years has been for consumers to purchase travel insurance at the point of sale.

“If they had travel insurance, cancellation fees would be irrelevant.”

He said the Office of Fair Trading – predecessor to the CMA – had previously ruled tour operators’ cancellation charges were justified.

CMA research claims 54% of businesses “don’t fully understand” what makes terms and conditions unfair and highlights that some companies keep all of a customer’s deposit if they cancel, regardless of the cost to the business.

However, a spokesman for CMA stressed new guidance was “not a crackdown on the travel industry, or any sector in particular”.

Thomson and Thomas Cook charge a percentage of the full holiday cost, staggered by how early the cancellation is made. Cook’s terms state that it takes either the set percentage, or the full deposit – whichever is higher.

Thomson’s charges are “to cover the cost of processing your cancellation, and to compensate us for the risk that we may not be able to resell” your holiday.

A Tui spokesman added: “If a customer needs to cancel or amend a holiday due to sickness or bereavement, we have a dedicated team to support them. Customers are advised on the importance of purchasing travel insurance to help in unforeseen circumstances.”

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