Abta cuts its travel cover

Abta cuts its travel cover

The Association of British Travel Agents (Abta) has cut back the protection it gives consumers who book holidays with its members - a move that has dismayed the Office of Fair Trading (OFT).

Until now, the Abta bonding scheme has covered all holidays and flights booked with a member travel agent. If the agent or operator went bust or absconded, Abta would step in and return any lost deposits, or fly home those people left stranded abroad.

Abta says it will continue to cover business failures, but from yesterday it will no longer cover losses if the travel agent physically fails to carry out that booking, effectively stealing the customer's money. Over the past 10 years it has paid out £5m in such instances. And Abta says it is also removing cover for those using agents to book accommodation only, online.

Following the changes, the Office of Fair Trading has this week announced that Abta's new code will, unlike the old one, not be approved by its Consumer Codes Approval Scheme (CCAS).

The OFT-run CCAS was set up in 2001 to help consumers identify businesses that promote consumer interests "beyond the basic requirements of the law". Currently it approves fewer than a dozen industry codes.

Colin Brown, OFT director of market transformation, said: "We are disappointed that Abta has taken the decision to change its code and withdraw from the scheme. The new Abta code differs from the previous one in a number of ways, including significant.....continued below

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changes to its financial protection scheme.

"Our door remains open for future discussions with Abta. The OFT will ensure codes and businesses displaying our Approved Code logo meet all our stringent requirements."

Abta says the changes to its bonding scheme will have little impact on holidaymakers. "As long as people receive the relevant documentation from their travel agent, clients' holidays will go ahead as normal if the agent fails. Even though we have withdrawn from the OFT Code Approval scheme, we will continue to work with it to ensure that our code remains the gold standard for the travel industry."

The spokesman advises consumers booking a holiday always to check their documents to make sure that the booking has been physically made with the operator. "Those who do not receive this conformation should contact Abta immediately," he adds.

Those people booking accommodation only will be offered insurance instead. Travel agents now have to make it clear that accommodation-only bookings are no longer covered by the bonding scheme.

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