Consumer financial protection and provision of refunds need simplifying with “too many options” creating public confusion, say senior industry figures, but there is disagreement on how to fix the problem.
Travlaw partner Krystene Bousfield highlighted the issue last week, telling a Travlaw industry event in London: “There are too many options for consumer protection and they overlap. It’s confusing for consumers and onerous for business.
“If you’re flight is cancelled, you have five different options for making a claim. You have insurers saying, ‘Go to your package provider’, and package providers saying, ‘You have Regulation 261 protection [for air passengers].”
Bousfield also suggested the courts “are so consumer friendly” that a legal claim “is probably going to come out in their favour” if someone is injured on holiday or wants a refund.
Alistair Rowland, speaking as chief executive of Blue Bay Travel although he is also chair of Abta, argued: “There is a lot can go wrong if you’re an organiser. The consumer doesn’t understand protection and these things don’t join up. You can’t expect consumers to understand it. It’s a merry go round.
“We know the consumer doesn’t know the difference between Atol and Abta, they just know it’s a guarantee.”
He suggested that a ‘hierarchy’ of those responsible for paying refunds depending on the type of booking and payment should be made clear to consumers, suggesting: “It should be transparent for consumers. ‘What did you book? How did you pay? This is what you should do.’”
Rowland insisted: “I don’t mind what the hierarchy is as long as there is one and it’s clear.”
However, Abta director of legal affairs Simon Bunce disagreed, arguing: “I don’t think a hierarchy solves it. You need to have clear parameters for who is on the hook [for a refund].”
Bunce suggested that businesses appearing higher in a ‘hierarchy’ of those liable to pay refunds would require increased financial security, raising costs for businesses.
Rowland noted the cancellation of flights to Mauritius due to a cyclone warning in mid-January and said: “We had people in Mauritius and a lot of people didn’t fly. As an organiser, you have to do the right thing.
“We had to move 50 people and put them up for three nights. We have a right of redress from the airline [for the cancelled flights], but am I really going to force that?”