Protect your holiday & avoid another Thomas CookBy Money Mage · · Travel, Frugality, Consumer Protection
It’s been a bad couple of years for the travel industry. Six tour operator collapses and thirteen airline collapses in 2018.
It’s terrible for the 9,000 employees of Thomas Cook who haven’t been paid their final salary. They’ll now have to claim via the Insolvency Service and wait weeks to get what they are due.
It’s also terrible for affected holidaymakers. The CAA has covered most return flights until ATOL. Some holidaymakers were not allowed to leave their hotels without paying again. Holiday from Hell.
You may also have a pre-booked holiday for 2020 that you’ve been paying off and are wondering what to do. If you are affected by the failure of Thomas Cook, check the dedicated CAA site
When it comes to Thomas Cook, there were strong signs of trouble in December 2018 and March 2019. I said in January package holidays can be replaced with staycations and DIY holidays.
Follow these 4 easy steps. You may be able to claim your losses back. Or at least, avoid the consequences of another collapse in the future.
1. Get Holiday & Travel Protection
Check that you have government & industry protection for your holiday. Most Thomas Cook packages were - but not all. If you don’t book your flight and hotel together you can run into issues.
You don’t need to book a traditional ‘package holiday’ to get protection.
What is ATOL?
ATOL (or Air Travel Organiser’s Licence) is the UK government protection scheme. It covers your travel if you book your Flight, Accommodation, and/or Car Hire via the same provider. The cover protects if you book:
- flights and accommodation (including a cruise), or
- flights and car hire, or
- flights, accommodation and car hire.
The UK Government operate ATOL via the Civil Aviation Authority.. Under EU Regulations, for what it’s worth.
Be careful when booking with ‘cheapest deal’ sites. Often you can book flights, hotel and car hire on these sites, but they are not booked via the same operator. You wouldn’t be ATOL protected. Some online sites do offer strong ATOL protection if you book flight & hotel together. Expedia being one.
You can also use online travel agents who provide cheap deals with ATOL and ABTA protection. I have used Dial A Flight in the past for overseas work travel which offered protection.
What is ABTA?
ABTA or Association of British Travel Agents is a regulated industry body. They provide cover and dispute resolution. It is useful for holidays that do not involve a flight or when ATOL protection is not available.
If you booked your holiday via an ABTA member, your holiday will be ABTA protected. ABTA provides cover in the event of company failure. If a company goes bust ABTA protection will enable you to continue your holiday or get a full refund.
ABTA also helps you resolve other problems or complaints about your holiday. You can use ABTA for dispute resolution. The operator has to abide by a code of conduct, and ABTA will help enforce.
2. Check your Travel Insurance
Not all Travel Insurance covers you for the failure of a company. Most don’t. You need to check the policy wording before buying.
There are a couple of travel insurance policy terms to look out for. Scheduled Airline Failure Insurance (SAFI) and End Supplier Failure.
Often these are not included by default and are a ‘bolt-on’. You will need to check your policy documents.
3. Keep your money safe
Be aware of how to keep your money safe. If your travel insurance doesn’t cover you, there is other protection.
EU Regulation 216/2004
If your flight is leaving or landing in the EU, you are covered by EU Regulation 216/2004. This provides cover for flight cancellation and delays based on flight duration.
This ranges from food, drink, accommodation, to full refunds for cancellations. It’s important to note that this regulation does not protect you in the event of airline insolvency.
Consumer Contracts Regulations
Hotel and B&B bookings made online are covered by the Consumer Contracts Regulations. This means if goods or services are not provided, you can claim. The Consumer Contracts Regulations also provides you with a ‘cool off’ period. Usually, 14 days to cancel.
You will have to make a hotel or B&B booking online for the Consumer Contract Regulations to apply.
The Consumer Contracts Regulations exclude package holidays. The legislation defers to ATOL. CCR may help you if a hotel or car hire does not fulfil their side of the bargain. The Consumer Contract Regulations won’t help in the event of insolvency.
Pay on Credit Card
If you pay more than £100 on your Credit Card, you are covered by Section 75 of the Consumer Credit Act. This means that your credit provider is jointly liable for the provision of goods and services.
If your airline or travel agent has gone bust, submit a Section 75 claim to your bank or credit provider. You will be refunded in full. This can take time. You will have to provide documentary evidence, like receipts.
Pay on Debit & Chargeback
If your purchase is less than £100 or you purchased on a Debit Card, you may be able to use Chargeback.
Visa, Mastercard and AMEX operate Chargeback schemes. They are not law but may cover you.
Talk to your bank in the first instance.
Avoid Gift & Prepayment Cards
Money Mage is not a fan of Gift or Prepayment Cards. You are placing your money into an unprotected business which may fail. Rather, place your money into protected savings. Use accounts protected by the FCSC (Financial Services Compensation Scheme). Your money is then protected up to £85,000.
0%-fee Travel Card
Some accounts offer 0%-fee transactions. These credit cards or bank accounts that will save those excessive foreign-transaction fees. This means you won’t need to carry cash. Don’t use prepaid, get an account with a card from an FSCS-covered bank.
4. Save for your 2020 holiday
Don’t be a Fruggle.
Don’t pre-book a huge package holiday.
Don’t book a holiday you can’t afford.
Don’t book a holiday without protection.
Understand your consumer protection & rights. Especially if the worst happens. Sickness or Insolvency.
Instead, why not consider a cheaper holiday? A Money Mage knows that expensive pay-via-monthly-direct-debit holidays hurt your wealth.
Instead, start saving for your 2020 holiday now. A 3% Regular Saver account, paying in £250/mo. You’ll have over £3000 by this time next year, £50 of it interest!
Plan a cheap holiday for 2020 now, and you’ll be mortgage free in no time. Subscribe for more.
Sources and Attribution
- Thomas Cook Airlines B767 (c) Transport Pixels, CC-BY