The Association of Atol Companies (AAC) has come out firmly against excluding low-cost holidays from the Package Travel Regulations (PTRs) but failed to take a position on the removal of domestic packages.
Both proposals were included in a Department for Business and Trade (DBT) Call for Evidence on reform of the PTRs issued in September and which closed on December 13.
The AAC noted in its response to the Call for Evidence that excluding low-cost holidays “makes no sense at all” and warned it could lead to “a rise in scammers”.
More: Atol reform expected to be delayed
Association of Atol Companies calls for ‘urgent’ refund rules change
It argued: “The theory appears to be that reducing regulatory constraints might lead to reduced costs to organisers and therefore cheaper holidays. We see no likelihood of this happening.
“The reality is likely to be a rise in scammers offering holidays with no protection and those least likely to be able to stand a loss being put at the greatest risk.”
The association told the DBT: “It makes a complete nonsense of the regulations, and we oppose the idea completely.”
AAC secretary Alan Bowen dismissed the proposal as “hare brained”.
However, the AAC was unable to come to an agreed position on the proposal to remove domestic package holidays from the PTRs, despite noting: “Domestic holidays can be as expensive as many overseas holidays.”
Its members “were split equally between those who thought they [domestic packages] should be outside the protection of the PTRs and those who considered they were as important to their customers as overseas holidays and should continue to enjoy protection”.
The AAC noted 44% of the members which responded to its survey on the proposals sold domestic holidays, “a much higher figure than we anticipated”.
The association told the DBT: “We look forward to the end of Linked Travel Arrangements and the confusion that surrounds them.”
It said it would support a review of the information provided to consumers at the point of sale and would “strongly urge” a substantial reduction in this information, suggesting: “The current requirements are almost certainly not being met by a substantial part of the industry.”
The AAC also came out strongly against changes to Atol holders’ financial protection options and to allowing use of overseas insurers, as proposed by the DBT.
In its response to the proposals, the AAC noted: “There are three main options to provide financial protection: bonding through an approved body, insurance against failure, and use of a trust account with backup protection from an insurance policy.
“The suggestion that further options could include a trust account with a bond as a top-up appears to be making things even more complicated than they are already.
“We asked members if they saw any need for additional options [and] 67% of respondents said they believed the current options were sufficient.
“We believe the current options for financial protection should be more than adequate without adding further confusion, which is likely to lead to some businesses not providing the level of cover required.”
The ACC added “we strongly oppose” the use of foreign insurers to provide protection to consumers travelling with companies using trust accounts.
“Only a company that is FCA-regulated and registered at Companies House can be checked adequately by the travel industry and its regulators.”
The Financial Conduct Authority (FCA) is the UK financial services regulator.
The AAC represents members with a combined turnover of more than £6 billion a year.
More: Atol reform expected to be delayed
Association of Atol Companies calls for ‘urgent’ refund rules change