Which? Legal Hour: Coronavirus and the consumer

This question was submitted by Pablo – thank you, for your query. I’m sure that many others are wondering this.

We have been told by some of our members that tour operators and travel agents are offering credit notes and vouchers instead of a refund when a holiday/flight has been cancelled. This is not something that you are obligated to accept if you do not wish to do so. ABTA guidance has suggested that refund credit notes are ATOL protected if your package travel contract/flight benefited from ATOL protection. However, there is no comment on this on the ATOL website. As such, we cannot confirm this position and there is a risk to accepting a refund credit note in this respect. Please ensure that you check the terms and conditions of any refund credit note and ATOL certificate that is presented to you. It is worth noting that generally a voucher or credit note would not offer protection if for example, the company that it related to ceased trading. In these circumstances a claim would need to be made against a credit card company if payment was made towards the holiday using a credit card or a travel insurance policy and would be considered on an individual basis.

I would therefore recommend that you continue to push for a refund rather than accepting an alternative remedy.

Hi @I.Conte

I appreciate that this information has been provided to you by Secret Escapes, however as mentioned previously, there has been no formal confirmation from the Civil Aviation Authority or the government that refund credit notes will be ATOL protected. Therefore, please proceed with caution.

My advice would be to continue to push for a refund.

Hi Catherine, I have just had look at the Bonded Coach Holiday’s website ( http://www.bch-uk.org/ ) and it states that:

“BCH safeguards your money in the unlikely event that your BCH tour operator ceases trading. You are guaranteed repayment of monies paid. It also ensures the completion of your holiday if it has already started.”

It explains the basis of this protection:

“Each BCH member is required to provide a bond from a bank or major insurance company to BCH. This bond is used to refund your money or to allow you to complete your holiday if already started. BCH also has an insurance policy available to cover unlikely situations where a members bond does not cover all the refunds.”

This appears to be a similar scheme to ‘ATOL’, which should cover you if your travel company becomes insolvent in the interim. I would still encourage you to read the terms and conditions of the voucher so you are fully aware of the extent and application of the protection.

If you have an upcoming holiday and are due to make payments, but you are uncertain whether the holiday will go ahead or, for instance, whether it could practicably go ahead due to quarantine restrictions, then the first stage is to consider the terms and conditions of the booking to establish what, if any, options may be available to you.

If you have a two-week package holiday, due to depart in the near future and, for instance, the destination is subject to quarantine for a period of 2 weeks, then the package company should be cancelling the holiday and providing you with a full refund of the package price.

Generally, if there is the possibility of the holiday going ahead as normal then normally we would recommend making payments in accordance with the contract (e.g. balancing payments); if you do not, then the business may have the ability to terminate the contract, retain any sums paid and, potentially and depending on the terms and conditions, pursue them for any further payments due under the contract.

As an alternative It may be that you would wish to try and discuss the position with the entity you booked with. There may be a possibility of transferring the booking to a later date. However beware that with package holidays, you will need to be certain that ATOL protection would extend to the rearranged booking.

We would recommend making any payments for holidays by way of a credit card as, should the business fail to provide you with a refund, for example if the holiday does not go ahead, then in those circumstances the credit card company may be jointly and severally liable under s.75 of the Consumer Credit Act 1974, i.e. you can pursue the credit card company for the whole refund, even if you only paid a proportion of the cost of the holiday on a credit card, as long as the booking was between £100 – £30,000 in total. If you did rearrange the holiday or booking, the credit card company may try and argue that that is a different contract and as such, that protection may not extend to that other booking.

Do check the terms and conditions of any travel insurance to see what further assistance you may have from that policy.

Hi DrSteveWhite,

Thank you for your follow up message. If you’ve paid by a credit card and they were to go into administration/liquidation then you could look to hold the credit card company liable i.e hold the credit card company liable for the performance of the contract or provide a refund if appropriate.

If they are only providing a partial refund and should be giving a full refund given the circumstances then you could again look to approach the credit card company.

I hope this helps,