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Holiday Protection - are you covered?

There have been some big travel companies going into liquidation recently, the biggest of which is Thomas Cook. There are several ways to protect your money when booking a holiday.

What’s the best way to protect my holiday if the travel company goes bust?

Holidays are exciting times, from a weekend getaway city break or a two-week holiday. Whichever type of holiday you’re planning, below discusses the different ways to make sure your holiday is protected.

ATOL covered holidays

If you’re a holiday goer in the UK travelling abroad anywhere, your holiday might be ATOL protected. ATOL can appear confusing and a lot of research. As a brief explanation, if a travel company does go bust and you’re on an ATOL covered holiday, you won’t be stranded. ATOL protection will bring you back home to the UK safely, and this can be via a repatriation programme put in place. If you have an upcoming holiday and the travel company goes bust, you will receive a refund via claiming – more on that later. Understandable so far? We’re going to add to that now as not every holiday is protected the same way. Here’s where things become more intense. Ideally, you want to book through an ATOL protected company. Mainly, it all comes down to the booking and holiday which you’re on. ATOL is about protection. You will have some rights if the travel company does cease no matter if you’re pre-departure or currently abroad.

If you’ve booked ‘all-inclusive/package’ holiday directly through an operator or a travel agent (side note: ‘all-inclusive’ holidays are different to ‘all-inclusive hotels’, hello free cocktails!) Your holiday is likely to be protected. Package holiday is flights and accommodation booked at the same time paying a set price. As always, restrictions apply. For example, if you’ve purchased a flight from one airline and a hotel through a different website, different rules will be in place. This does mean you might not have an ATOL protected holiday, should the company go bust.

If you’ve purchased flights only through a local travel agent, there’s a chance those flights aren’t ATOL protected. Or, the holiday itself purchased through the travel agent may not be protected; they aren’t a safety net. It is cliché, but if you are unsure please do take the time to ask, it is the best way of knowing upfront. Another way of knowing is you have an ATOL certificate. Yes, it looks like a piece of paper with a strange design on but don’t be deceived, it is essential. You’ll have either a package single contract, package multi contract or ATOL protected flight only certificate. All of which mean you’re protected. What about if you’ve only paid a deposit so far? Good news is, it doesn’t make a difference; you can have the certificate. You’re financially protected, and it will make sure you don’t end up out of pocket. Look out for the ATOL logo in your travel company’s brochures, adverts and websites.

Another way to find out about your holiday is through a useful tool on the ATOL website. Anyone can locate information and discover if the company is protected, and this does also apply to companies outside of the UK. To search, you’ll either need to know; ATOL number, trading name or business name although the website isn’t available at the time of writing (Sorry folks!).

If the company is ATOL protected, it doesn’t matter if you’re pre-departure or currently on holiday when the company goes bust, you can make a claim. The best way is to check your certificate as it will provide you with the procedures. Here’s your ATOL claim form but if you’d prefer to speak to someone, you can call your tour operator or travel agent.

One last thing, there’s an equivalent of ATOL for cruises, self-drive or rail holidays. More on that later!

Is there an equivalent to ATOL if you live in the US or other parts of the world?

ATOL is only for UK holiday goers. If you live over shores, your government may have slightly different laws in place to protect your holiday. They vary from country to country. The best way to find out what your rights are and what would happen to your holiday should the company/airline you’re with go bust is to research. It might even be one more thing to relax about while you’re enjoying your holiday. For example, if you’re Australian, the national Australian Consumer Law (ACL) applies in every state and territory at the commonwealth level. This law applies consumer rights to your domestic or international flight booking, and a service is provided within a reasonable time. Generally, the government won’t assist with protection if the company goes bust, so it is essential to know about this law. Just to stress, this law doesn’t replace the need for travel insurance.

In Europe (including Guadeloupe, French Guiana, Martinique, Réunion Island, Mayotte, Saint-Martin (French Antilles), the Azores, Madeira and the Canary Islands, Iceland, Norway and Switzerland), there’s the EU261. Your rights here do cover circumstances such as a cancelled flight.

Across the pond, over in the United States, at the moment there isn’t a set government-backed legislation in place. Wherever you’re from, the best way to protect your holiday before you travel is to research. Yes, it will take some time and research, but it can be valuable. Check out the airline, like you would with a potential employer or maybe even a new car purchase. No matter where you’re from if you can, before booking, study the airline you’ll likely be flying with. Browse through news articles and internet searches to see if they have any financial issues. It’s also worth taking a look to see if they’re a new company. Especially useful if your holiday involves you flying to a destination, and then using an airline, you might not know so well to fly to a different destination. Check the airline tickets terms and conditions to discover what they have in place to cover the airline going bust. Holidays are significant purchases and, if you choose to pay via a debit or credit card, this could be your silver lining. Even though you might not think much about the payment method when booking.

Paying by credit card

No matter if you’ve paid or about to pay by credit card, check out section 75 of the Consumer Credit Act (for UK holiday-goers). The news might focus mainly on the travel company itself, and it’s important to remember this gem. Initially, yes you may have to pay a surcharge when you book. It might seem like your money is disappearing for no other reason than your preferred payment choice, but, there’s an advantage. The surcharge you pay could be less than the money you’ll receive if the company goes bust. It’s a massive advantage for you to have. Thanks to Consumer Credit Act, your credit card provider, has to pay you some money. Even though it’s the travel company which has gone bust, the provider can be equally liable to pay the refund. If you’re independent or booking flights and accommodation separately because it’s worked out cheaper, ATOL won’t be able to help. Instead, speak with your credit card company to see what they can do for you. Even if you aren’t in the UK, definitely still take a look! It’s often hidden away in t&c’s but, your holiday could be protected in some form this way. The credit card company has failed to you with a service (your holiday/flights). It varies by not only countries but also credit card providers, and you might be able to receive a refund through claiming to your credit card company.

Paying by debit card

If you’ve paid for your holiday on a debit card, you can issue a ‘chargeback’. Contact your bank, and they can put in a request with the airline or holiday company. It’s like a friend putting in a decent word for you as a ‘chargeback’ isn’t a legal right. There’s a time limit of 120 days from when you made the transaction or when you’re due to receive the services. Don’t put it off as every day counts. You have to show proof of purchase, so no matter how you pay by debit card, it can make all the difference having your receipt safe.

Holiday insurance

Yes, holiday insurance could be the one to have your back protecting your holiday. All holiday insurance companies want you to purchase them; some could be above average. When purchasing holiday insurance, take a look at what you’re buying. The holiday insurance company might have a form of holiday protection in place airline insolvency. The latest report (April 2019) is an incredible 109 pages long. The report is relatively new to the travel industry as it was set up in October 2017 and requires airlines to have insurance. Travel insurance companies with an airline insolvency policy is a huge perk for your holiday.

Let’s say your holiday isn’t ATOL covered and you’ve used an alternative method from credit/debit card to pay. Take a look at your insurance as it can be vital.

ABTA - the equivalent of ATOL for cruises, self-drive or rail holidays.

A great way to think about ABTA and ATOL is like two close friends. They have similarities with one another, but they’re also unique. ABTA can cover your cruise, self-drive or rail holiday, so while it won’t be ATOL protected, you might have ABTA. Cruises within the UK which don’t include flights or non-fly cruises are not ATOL protected even if you have purchased through a UK company. How does it work? ABTA has a list of members, and these members have to follow a code of conduct giving you protection. Again, similar to ATOL, ABTA will provide you with alternative travel arrangements or a refund because of their financial protection scheme. They do have a requirement, and it only applies if they’ve had to cancel your booking after the date of a refund for the full price of your holiday.

Other ways to protect your holiday in case a travel company goes out of business.

Sorry! All of the best ways to protect your holiday are listed above. Please stay safe out there! When travelling and being on holiday goes right, it’s an excellent enjoyable way to relax gaining new experiences. A travel company going bust is the worst-case scenario and a serious topic. When you can follow these methods above and have some comfort in knowing you’ve done everything possible to protect your holiday.