ABTA has scrapped its bonding rules for members and opened the door for online companies to join the association.
In a major drive to modernise the trade body, Newman Street admitted it needs to become more representative of today's industry.
It will also no longer guarantee consumers that they will either be refunded or get their holiday in the event of a company failure. The association said it had been the victim of fraud too often.
An awareness campaign will be launched to inform the public of the changes.
Spokesman Keith Betton said the "old-style" association that represented traditional companies in the 70, 80 and 90s had effectively been ditched and replaced with a more forward-thinking body.
Lastminute, Expedia, Opodo and ebookers are now all expected to consider joining ABTA.
"It's important that when we tackle the government, we have the majority of the industry with us," said Betton. "We cannot lobby Tony Blair and only be speaking for part of it."
He admitted that the relevance of the association would have continued to fade had changes not been made.
Among the major changes is a relaxation of ABTA's stringent bonding requirements. Although bonding will remain - and remain as the preferred method of financial protection - companies can make other financial arrangements through a trust fund with another body or through an insurance policy.
ABTA will not monitor the trust fund, requiring only a declaration that the law is being complied with. All claims will be handled by trustees.
It was the bonding requirement which deterred online companies from joining as the bonds - calculated as a percentage of turnover - would have been exorbitant.
An Expedia spokesperson said: "It is good to see that ABTA recognises the growth in the market of those consumers who wish to book all or part of their trip on the Internet.
"Once we have had a chance to review the new membership criteria then we will certainly work with ABTA to establish the best way forward. It is imperative that industry organisations reflect the future."
In further changes, members will be spared the arduous and costly task of submitting audited accounts.
Consumers will also feel the effects of the shake-up. Whereas previously it guaranteed to either refund or ensure the holiday went ahead if a member went bust, that will no longer happen.
"ABTA will no longer pay claims where the retailer fails having taken money without making a booking," said Betton. He said the association had been a victim of fraud too often.
"We need to clearly communicate this," said Betton.
In addition, while ABTA will continue to pay out to an operator should a retail member fail, claims will be capped at three times the operator's annual subscription.
It will end enormous payouts made the association when large retailers - such as Cruise Control - go out of business.
With Permission from Travelmole.
Customers losing protection against ABTA travel agency failure under changes being introduced by the association is "bad news", according to the boss of Travel Counsellors.
The homeworking agency's chairman David Speakman said: "This latest move by ABTA is extremely bad news for customers.
"Even if they book with an ABTA agent, if that agent fails the new rules means they will not get their money back."
His company left ABTA and created a Financial Trust, independently administered by the Barclays Bank Trust Company, in September 2004 due to "loopholes in the financial protection" offered by the association and ATOL.
Speakman added: "There is no doubt that establishing the Travel Counsellors Trust was the right thing to do. It gives our customers a copper bottomed guarantee that their money is 100% protected."
An example of when the company's Trust came into effect was after the failure of low cost airline EUJet last year. Three Travel Counsellors' customers who booked by debit card and so were not covered by their credit card company received full reimbursement.
If they had booked independently or through an ABTA agent they would have lost their money under the association's new guidelines, according to Travel Counsellors.
With permission from Travelmole
The homeworking agency's chairman David Speakman said: "This latest move by ABTA is extremely bad news for customers.
"Even if they book with an ABTA agent, if that agent fails the new rules means they will not get their money back."
His company left ABTA and created a Financial Trust, independently administered by the Barclays Bank Trust Company, in September 2004 due to "loopholes in the financial protection" offered by the association and ATOL.
Speakman added: "There is no doubt that establishing the Travel Counsellors Trust was the right thing to do. It gives our customers a copper bottomed guarantee that their money is 100% protected."
An example of when the company's Trust came into effect was after the failure of low cost airline EUJet last year. Three Travel Counsellors' customers who booked by debit card and so were not covered by their credit card company received full reimbursement.
If they had booked independently or through an ABTA agent they would have lost their money under the association's new guidelines, according to Travel Counsellors.
With permission from Travelmole
This is not good news for the consumer. It used to be the case that booking with an ABTA bonded agent offered protection in the event of the company going bust, but it sounds like we have lost that protection.
This means there is even more reason now to ensure that you use a credit card for booking as you would have some recompense through the credit card company.
luci
This means there is even more reason now to ensure that you use a credit card for booking as you would have some recompense through the credit card company.
luci
Oh dear, here we go again. I can see all the crooks out there rubbing their hands with glee. Whilst I can accept that the bonding system is being changed, simply asking for a declaration that "something" is in place is a licence to print money.
When you consider all the stories we hear of how people have been swindled you would think that they would have learned something from it.
I worry not about the high street names. They are big enough and sensible enough. The switch to DIY and internet really will make it wide open to the criminal element.
fwh
When you consider all the stories we hear of how people have been swindled you would think that they would have learned something from it.
I worry not about the high street names. They are big enough and sensible enough. The switch to DIY and internet really will make it wide open to the criminal element.
fwh
Found this article on the web thought it might be of interest
Travellers' Abta protection under threat
By Ginny McGrath
http://travel.timesonline.co.uk/article/0,,10295-2021510,00.html
*Edit to replace copyrighted material with link - Glynis*
Travellers' Abta protection under threat
By Ginny McGrath
http://travel.timesonline.co.uk/article/0,,10295-2021510,00.html
*Edit to replace copyrighted material with link - Glynis*
I always pay for holidays by credit card. If the spend is £100 or more and less than £30,000 the credit card company will reimburse you should the travel agent and/or tour operator go bust.
There's some doubt about foreign transactions - and hence you cannot always be certain that the company you are paying by credit card is based in this country if it's done on the internet. Check out their "Contact Us" section and if you're worried or suspicious, try a search on their name via google to see what pops-up. If some pointers are in foreign languages they could be overseas based. You can always ask for their merchant number then contact your credit card company and ask for assurance that section 75 of the credit card provisions will apply before parting with your money.
Who needs ABTA anyway ? There's been many posts on this site about the toothless inability of ABTA to resolve disputes and seek redress from wayward members.
But watch out for an increase in the credit card percentage fee from Travel Agents - they'll be keen to cash in on that little earner.
Mike
There's some doubt about foreign transactions - and hence you cannot always be certain that the company you are paying by credit card is based in this country if it's done on the internet. Check out their "Contact Us" section and if you're worried or suspicious, try a search on their name via google to see what pops-up. If some pointers are in foreign languages they could be overseas based. You can always ask for their merchant number then contact your credit card company and ask for assurance that section 75 of the credit card provisions will apply before parting with your money.
Who needs ABTA anyway ? There's been many posts on this site about the toothless inability of ABTA to resolve disputes and seek redress from wayward members.
But watch out for an increase in the credit card percentage fee from Travel Agents - they'll be keen to cash in on that little earner.
Mike
So out of interest is there a time limit in which the credit card company can reimburse you?
Mike
Out of interest do we have to pay for the whole amount of the holiday on credit card to be protected. Or can we pay say the deposit if it amounts to more than a few hundred pounds.
Out of interest do we have to pay for the whole amount of the holiday on credit card to be protected. Or can we pay say the deposit if it amounts to more than a few hundred pounds.
Section 75 of the Consumer Credit Act 1974.
see this link: http://www.financial-ombudsman.org.uk/publications/ombudsman-news/31/creditcards-31.htm
and you'll see, about 11 or 12 paragraphs down, that even paying just the deposit covers you for the entire holiday cost.
As is often the case with legislation, there are some complexities. Buying Airline or other travel tickets from a Travel Agent, even if you paid by credit card, will not cover you as the agent is only supplying a ticket and not the flight service itself. However, buying a 'package' of travel arrabgements from a travel agent is covered.
Debit (switch) cards are not covered. Charge Cards (Diners Club and some American Express cards) are also not covered. Paying with a credit card cheque is also not covered - perhaps why credit card companies have, in the past, tried to push these as "convenient" to use.
The initial deposit transaction MUST be more than £100 (including vat) and not more than £30,000.
I believe foreign purchases (purchasing from an overseas supplier - even if you do so whilst in the U.K. - on the phone or internext for example) may not be covered. I understand there's some doubts until a test case is heard in court.
So, who needs ABTA's financial safety net. Just pay the deposit by credit card then the final balance bu less expensive means.
Cheers, Mike
see this link: http://www.financial-ombudsman.org.uk/publications/ombudsman-news/31/creditcards-31.htm
and you'll see, about 11 or 12 paragraphs down, that even paying just the deposit covers you for the entire holiday cost.
As is often the case with legislation, there are some complexities. Buying Airline or other travel tickets from a Travel Agent, even if you paid by credit card, will not cover you as the agent is only supplying a ticket and not the flight service itself. However, buying a 'package' of travel arrabgements from a travel agent is covered.
Debit (switch) cards are not covered. Charge Cards (Diners Club and some American Express cards) are also not covered. Paying with a credit card cheque is also not covered - perhaps why credit card companies have, in the past, tried to push these as "convenient" to use.
The initial deposit transaction MUST be more than £100 (including vat) and not more than £30,000.
I believe foreign purchases (purchasing from an overseas supplier - even if you do so whilst in the U.K. - on the phone or internext for example) may not be covered. I understand there's some doubts until a test case is heard in court.
So, who needs ABTA's financial safety net. Just pay the deposit by credit card then the final balance bu less expensive means.
Cheers, Mike
Post a Reply
Please sign in or register an account to reply to this post.
Similar Topics
- Food and revamp at our hotel..
-
Good News or Bad news for Anjuna???
Posted by goldenflipflop in Goa Discussion Forum
-
Hertz customers arrested
Posted by Fiona in General Holiday Enquiries, Hints and Tips
-
Any Natwest Gold customers?
Posted by Birdygirl in General Holiday Enquiries, Hints and Tips
-
Teletext calls with customers exposed....
Posted by Lance Chambers in General Chat