Abta has lost its government seal of approval after it reduced the amount of financial protection it offers holidaymakers.
The organisation, which represents the majority of UK travel agents and tour operators, will no longer refund tourists who have been sold non existent holidays by fraudulent agents.
Change to code of conduct
The Office of Fair Trading (OFT) says this change to Abta’s code of conduct means it can’t back the revised scheme because it doesn’t offer the same financial protection to consumers.
The OFT had approved the old code of conduct.
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 changes to its financial protection scheme.
‘Our door remains open for future discussions with Abta. The OFT will ensure that codes and businesses displaying our approved code logo meet all of our stringent requirements.’
In May the OFT criticised Abta for wriggling out of its obligations after Which? highlighted the plight of Roger and Patricia Calvert.
The couple had paid for a two-week break to Tenerife with Elite Travel, which was a member of Abta when they booked.
But on arrival at the hotel, they discovered their booking had been cancelled because Elite hadn’t passed on the money.
Elite promised the couple a refund but didn’t pay up. So Roger contacted Abta but it refused to help because Elite’s membership had ended before the couple went on their trip.
The OFT, which had approved Abta’s code earlier this year, criticised the trade organisation for breaching the spirit of the code.
It told us: ‘As a common courtesy we would expect a trade association to offer assistance and advice in this situation. It can’t just leave the person in the dark.’