Holidaymakers With Credit Notes Will Get Refunds For Cancelled Trips Even If Firm Collapses, Government Says
Would-be holidaymakers who accept refund credit notes for cancelled package trips will get their money back if the issuing travel firm later collapses, the government has confirmed.
The Civil Aviation Authority (CAA) said the Department for Transport had provided “much-needed clarity” by confirming that such cases will be covered by the Atol scheme.
Package holiday customers whose trips have been cancelled due to the coronavirus pandemic are entitled to a cash refund, although many travel companies are offering refund credit notes to help their cash flow.
These allow customers to re-book their holiday or request their money back at a later date, but there have been doubts as to whether they are protected by Atol.
The scheme is normally used to stop package holiday customers being stranded abroad or losing money from future bookings when operators collapse, as happened with Thomas Cook in September 2019.
Consumer group Which? has been advising people to reject refund credit notes and “insist on a refund” because of concerns about them being worthless if the issuing firm goes bust.
Transport secretary Grant Shapps said the move sent a “clear message” that people could book their holidays with confidence.
He told BBC Breakfast on Saturday that it would also prevent travel companies from collapsing, because they could offer holidaymakers credit notes instead of having to pay a refund.
Shapps added: “Up to now anyone who had a package holiday, a holidaymaker, would have been asking potentially for a straightforward refund, maybe because they were aware that if the holiday company itself went down then a credit note would not be honoured.
“What I have done today is said actually we need to make sure we are going to stand behind Atol so that, if you do have possession of a credit note, that will still be honoured, backed by government, even if that travel company goes down.
“That’s going to both reassure, I hope, consumers, holidaymakers, but also prevent,...
