Abta accused of ‘moving goal posts’ on bond renewals

Abta has been accused of “moving the goalposts” on bonding requirements after it issued guidance to members seeking March bond renewals.

This reveals Abta “may apply up to 75% relief on the percentage of direct bookings made . . . using UK-issued credit cards”, which is below the 80% relief on bookings expected by at least some in the sector.

A leading industry source suggested “a mid-sized bond” previously set at £2 million “is going to double” and said: “I don’t know how the majority will cope.”

MoreAnalysis: Abta issues guidance as it cuts card sales relief

That view was disputed by Alan Bowen, legal advisor to the Association of Atol Companies, who insisted: “This really only applies to those booking low-cost carriers using customers’ cards. It will affect OTAs and a few doing dynamic packaging.”

An Abta spokesperson insisted: “It’s very unlikely credit card relief would result in the doubling of bonds.”

Abta explained: “Some companies have been holding customer monies, including refunds, for longer periods than normal as a result of the pandemic. At the same time, many companies have continued to take new bookings.

“This presents a different risk to pre-pandemic years and the bond calculation needs to take into account the amount of customer monies that need to be protected.

“We’ve developed guidance for members renewing their bonds in March 2022 – based on our claims experience and the rules that apply when customers submit a claim to their card issuer – to assist them with completing the renewal documentation and to help them understand how their bond will be calculated and how much credit card relief we may be able to apply.

“While some members may receive less credit card relief than in previous years, other members may receive more. Any bond increase will be driven by the customer monies at risk and the members’ financials.”

Bowen acknowledged the bond for a £10 million business could double, but said: “The failure of Cruise & Maritime Voyages [in July 2020] may have woken Abta to the fact that it may have been under-bonding.

“It’s looking at the wider picture and doing the right thing for the membership as a whole.
“Those hit by this will probably be aggrieved. [But] everybody is going to see a tightening of bonding.”

MoreAnalysis: Abta issues guidance as it cuts card sales relief

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