You WILL get a refund if your holiday firm goes bust: Thousands of families who accept credit notes for cancelled breaks will get a Government money-back guarantee
- Guarantee scheme announcements gives people confidence to book holidays
- New law protects people if the UK Foreign Office later advises against travel
- Grant Schapps, Transport Secretary said the announcement was ‘good news’
Thousands of families who choose to accept credit notes for cancelled holidays are to get a money-back guarantee from the Government.
The move is designed to boost confidence in booking package holidays at a time when many tour firms fear for their future.
The guarantee scheme, which has been announced by the Government and the Civil Aviation Authority (CAA), means people will be able to book a sunshine trip with confidence.
Families who choose to accept credit notes for cancelled holidays are to get money-back guarantee from the government
The guarantee scheme means people will be able to book a holiday with confidence that they will get their money back if the Foreign Office advises against travel
Under the law, people whose package holidays were cancelled because of Foreign Office advice against travel were entitled to a cash refund.
In fact, many volunteered to accept a credit note or – controversially – were pressurised into doing so by the cash-strapped holiday firm involved.
There was a danger these credit notes would be worthless if the travel firm subsequently failed.
However, the Government move means people will get their money back in these circumstances.
This protection is further reinforced by the fact credit notes or vouchers can be exchanged with the travel company for cash at any time up until September 30 next year, if not redeemed against a holiday.
The guarantee relates to package holidays or cruises, where they include a flight, and are covered by the ATOL protection regime. It does not cover airline tickets or a cruise without a flight.
Transport Secretary Grant Shapps said: ‘We want to send a clear message to passengers that they can book their summer holidays with confidence, which is why we’re stepping in to protect refund credit notes issued as a result of Covid-19 cancellations.
Grant Schapps, Transport Secretary said the latest announcement was ‘good news’ for people looking to get away for a sunny break
‘This is not only good news for anyone looking to get away for a break in the sun, but also for the aviation and travel sector which has been hit hard by the pandemic.’
Martin Lewis, founder of MoneySavingExpert.com, said: ‘This is a key travel intervention we’ve been calling for.
‘It’s far from a cure-all, but ATOL is a statutory scheme and the fact the Government will now effectively underwrite its credit refund notes gives a solid bedrock of security for customers willing to take them.
‘And I’d encourage those who it’s right for to do so. The pandemic has been devastating for the travel industry and travellers.
‘Of course it’s not right for everyone, many desperately need a refund. My hope is this more solid halfway house for some will enable firms to more swiftly pay out full refunds for others.’
The ATOL fund is run by the CAA and requires travel operators to pay a fee of £2.50 to protect each passenger booking in cases of insolvency.
The money, which is held in a fund managed by the Air Travel Trust, is used to refund, repatriate or reimburse travellers for the cost of repaying for the affected parts of their trip.
Mark Tanzer, of travel industry trade body ABTA, said: ‘This gives reassurance to consumers and supports the travel industry at an especially difficult time.’
But consumer group Which? said package travel firms should not use the Government guarantee as an excuse to force credit notes on customers instead of cash refunds.
Editor Rory Boland said: ‘Holiday providers must do right by their customers. Otherwise, the regulator must be ready to take strong action against those continuing to flout the law on refunds.’