Trailfinders and trust provider Protected Trust Services (PTS) have accused Alan Bowen, legal advisor to the Association of Atol Companies, of making “misleading” comments about trust accounts following the failure of Teletext Holidays’ parent Truly Travel.
Bowen claimed the failure “shows a real flaw” with trusts after Truly failed to refund customers for cancellations due to Covid, leading the Competition and Markets Authority to launch legal action over £1.2 million in unpaid refunds (Travel Weekly, November 4).
But Trailfinders chief executive Toby Kelly described the remarks as “misleading”, saying: “It is yet to be determined whether the Truly Travel trust account will refund all those it needs to.”
Kelly acknowledged a trust model “where money can be paid to suppliers means it is possible a trust account is deficient if a supplier does not refund”.
But he argued: “Over the past 10 years the companies that have failed with trust accounts have not cost the Air Travel Trust Fund [ATT] anything. Whereas multiple failed operators without trust accounts have called on the ATT to the tune of hundreds of millions of pounds despite having bonds in place.”
He added: “All those with trust accounts still contribute to the ATT for every Atol-protected booking.
“The ‘ultimate’ trust account, which Trailfinders operates, is preferable, where all client money is untouched until travel is complete.”
PTS financial director Tom Clay also weighed in, insisting: “Trust accounts offer far more comfort than any other protection model. One failure does not mean the model doesn’t work.
“Thomas Cook and Monarch are examples of the enormous flaws of the bond protection model. Trusts are not flawless. But the consumer and the ATT are in a far better position where the only use of a consumer’s money is for payment of suppliers.”
However, Bowen said: “The fact people have waited 14 months for their money is a sign the money isn’t there. If you had the money, surely you would pay it?
“The problem is not the 99% of failures. The problem is Thomas Cook and Monarch. We all agree businesses linked to airlines should be looked at differently.