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I just dont get it - where has all the money that customers paid gone?
That is the £50m question Jenny!
This really is a mess. In future things may get worse because the new Package Holiday Directive positively endorses the notion that travel operators can choose the country with the best i.e. cheapest form of financial protection and the rest of Europe has to accept it. With Brexit perhaps this government will take steps to avoid that specific issue whilst endorsing the good bits of the law.
The CAA did issue advice when Low Cost left the UK and issued advice to ATOL holders who had been buying accommodation from them last Friday reminding them of the need to re-book or refund the whole sale if they could not find a replacement bed. Whether that causes some real ATOL holders to fail remains to be seen, hopefully those selling this way have taken out supplier failure insurance and won't suffer any long term effects.
It does beg the question whether suppliers of a single service such as accommodation only ought to be required to provide financial protection or whether payments should be withheld until passengers have travelled? The hotels certainly were not getting paid in advance and some are now claiming that the prices being quoted by Low Cost were below the prices expected by the hotels in the first place! It has always been easy to sell a £100 room for £50, the only problem is when you have to pay the £100
Its chargeback time! Its not like anyone paid lowcost using cash is it?
Whoever is Lowcost's merchant acquirer will be trying to ensure the ATOL schemes cover not them....... chargebacks will only go so far until the MA decide no more cash held to cover liabilities
Well well surprise surprise: but do B2B customers realise that if they booked their holidays via an OTA who used Low Cost Beds as a supplier they are entitled to claim back their holiday monies via the OTA? The OTA needs to find them alternative accommodation but if unavailable the consumer has the right to a refund via the ATOL scheme of these OTAs? strange no one has explained this to consumers?
Absolutely that's what the ATOL Scheme is for, surely the CAA will force this?
Not one of the OTAs is going to come out and say this but clearly consumers do not know this is a channel open to them! I think travel weekly need to explain this to people. Even the likes of Simon Calder in his Independent piece yesterday missed this point!
The CAA is not required to take any action unless an ATOL fails. It is the ATOL holder who is obliged to provide an alternative holiday or a full refund due to the LC failure.
The CAA does indeed have responsibilities & powers beyond acting on an ATOL holder's failure:
'General consumer law under Part 8 of the Enterprise Act 2002 2.4 We are a designated enforcer under Part 8 of the EA02 and have powers to act in the collective interest of consumers in respect of a range of consumer law. This includes legislation regarding unfair trading and contract terms.
We are also a competent authority under the Consumer Protection Cooperation Regulation (CPC).9 This provides powers to refer cross-border issues affecting UK consumers for action by the EU enforcer where the business is based'.
yes the ATOL holder needs to find an alternative or refund the customer. Does not the CAA need to come out and explain this on its website?
CAA website does spell it out. They have a notice and FAQ on the Lowcost failure. ATOL holders are also advised of their responsibilities when they obtain their licence.