LONDON, UNITED KINGDOM–(Marketwire – July 23, 2010) – International Passenger Protection (IPP), the world’s leaders in credit insurance to the travel industry has warned that the misery suffered by thousands effected by collapses such as Goldtrail, Globespan , XL and many other will continue to damage the industry if they do not face up to the responsibility of an informed sale especially as more collapses are predicted.
IPP’s Director Paul Mclean stated “no one wants to see scenes of people holiday dreams ruined, the industry has tried to find solutions for consumer protection over decades without success. The fact is that no one levy or insurance will cover everything, the exposure is simply too big. The governments direction towards simple regulation of travel sales by giving an informed sale to the public that all, part or none of the travel arrangements booked are protected is no doubt the way forward and surely easier for the government to pass. It would therefore be the travel companies’ commercial decision to obtain any additional form of consumer protection such through insurance for all aspects of their business before confirming such protection or not to their customers.”
The latest Goldtrail collapse has left potentially thousands of consumers out of pocket for arrangements that were in fact not protected a shock to people whom thought seeing the company had an ATOL meant they were fully protected. Even agents themselves are faced being out of pocket by thousands of pounds due to a change in business terms by Goldtrail creating ATOL to ATOL bookings leaving agents liable for lost costs.
Mclean added “ATOL is a great service but sadly is misleading for the public as well as agents who simply cannot understand what is and what is not covered. The booking process should be a simple quote for the client’s requirements and give them a two part confirmation that they sign outlining all, part or none of the arrangements are protected. If the industry does not embrace such responsibility then it’s without a doubt the industry will be forced eventually to pay over the odds to cover these impossible exposures. If one is informed at the point of sale that financial protection is in place or not it’s better than a sale where you believe there is protection when there is not. This creates an informed sale and the choice of protection is the customers.”
The collapse of package holiday group Goldtrail, which has left 50,000 customers rushing to rearrange their summer holiday plans, is expected to cost the government-backed consumer protection scheme close to £20m in repatriation costs and refunds.
A £1 levy on package holidays was introduced three years ago to fund repatriations and refunds in the event of travel companies going under. It was raised to £2.50 last October in response to the collapse of XL Leisure in September 2008, which cost the scheme £27m.
A claim of this scale on Atol’s Air Travel Trust scheme — already £32m in deficit and dependent on a taxpayer guarantee — could force the government to consider further raising the levy on holidaymakers.