My travel company has gone bust, what can I do?

It's vital to find out whether your booking is protected if your holiday company has gone bust. Here's what you need to know - plus the impact on your travel insurance.

Package holidays

The Package Travel, Package Holidays and Package Tour Regulations 1992 require organisers of package holidays to provide protection for your money and to bring you home if necessary.

If you book a package holiday that includes a flight, then your money must be protected under the Air Travel Organisers' Licensing (Atol) scheme. This is operated by the Civil Aviation Authority (CAA). 

Atol protects your money if a company involved in the holiday goes bust before you depart and guarantees you will be brought home if the company collapses while you are abroad. 

Flights with accommodation and or car hire 

Flight Plus is a new type of holiday sale. It means that firms now need an Atol to arrange and sell flights with accommodation and/or car hire.

The flight and accommodation and/or car hire, have to be requested on the same day or within a day either side but it does not matter which is requested first. It is the timing of the request to book, not the booking, which triggers the need for protection when the holiday is subsequently sold.

Flight Plus  The catalyst for requiring protection is when overseas accommodation or car hire, or both, are requested with a flight. If neither of these is requested with a flight, protection is not required as a Flight Plus.

Once it has been established that it's a Flight Plus and protection is required, other elements requested with the holiday, for example theme park tickets, must also be protected, if those elements form a significant part of the holiday. However, a request for these elements solely with a flight does not create a Flight Plus without accommodation and/or car hire.

Protection certificate  In order to assist you in knowing where you stand, travel agents and tour operators selling holidays involving a flight with hotels or car hire must now give you a certificate explaining how your holidays are protected.

Flight only arrangements

The Civil Aviation (Air Travel Organisers' Licensing) Regulations 1995 are overseen by the CAA and require tour operators who sell flight-only arrangements to provide protection for your money and to bring you home if necessary. This protection does not apply to flights that are bought directly from an airline.

Flight-only arrangements bought through a travel agent aren't always protected under the ATOL scheme. You should always ask. Where travel arrangements aren't already protected, most ABTA Members will be able to arrange protection using a suitable insurance policy.

Keep the evidence  If a protection scheme is in place for your money, it's important that you obtain and keep all relevant paperwork so that you can make a claim for your money if necessary.

Section 75 protection

You may also have a claim against your credit card company under section 75 of the Consumer Credit Act 1974

To be eligible, you need to have paid more than £100 for your flights or holiday, and used your credit card to book direct with the tour operator or airline - usually this means it needs to be either the airline or holiday company listed on your credit card bill. 

But, some credit card companies will give a refund even if you've paid via a travel agent and it's the agent's name listed on your credit card bill. 

Alternatively, if the tour operator is a member of ABTA (The Travel Association), your money will be protected by the Association even if the credit card company is also liable, as long as there is a booking in place.

Who to contact to make a claim?

You should contact the holiday company to make sure that the booking is in place. If it is, then your travel arrangements should continue unaffected. It’s important to keep all your booking information. 

Contact the ABTA claims enquiries office for advice and assistance. Tel: 0300 303 1522.

Travel insurance

It would also be a good idea to contact your travel insurance company. 

Not all travel insurance policies will cover you in the event that a travel company goes bust. 

Make sure you double check the small print to ensure the policy includes end supplier failure. This should cover you if companies you have booked through - such as your airline, car hire firm or accommodation supplier - fail. 

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