Goldtrail Travel collapse causes chaosConfusion over how customers will get money back

19 July 2010

Airport sign directing travellers to the terminal.

Tens of thousands of Britons have had their holiday plans ruined by the collapse of travel firm Goldtrail Travel Ltd., which went into administration on Friday.

Some 16,000 people were stranded abroad this weekend, while a further 2,000 found themselves unable to get to their holiday destinations after the tour operator’s descent into bankruptcy.

Yet while the Civil Aviation Authority (CAA) says most people stuck overseas will be flown back to the UK on Monday, many Goldtrail customers may find claiming back the money for their wrecked holidays complicated and will need to rely on their travel insurance policies or Section 75 of the Consumer Credit Act.

Goldtrail and ATOL

ATOL (Air Travel Organisers’ Licensing) is a financial protection scheme for holidaymakers, designed to ensure consumers do not lose money or get stranded in other countries in the event their tour operator fails.

Although complete package holidays sold by Goldtrail Travel Ltd. were ATOL bonded, many of the holidays sold by the firm were charter flight-only deals – and this means additional elements of the holiday, such as accommodation, will not be covered under ATOL.

Goldtrail customers: what to do

Goldtrail customers who are already abroad and do not have full ATOL protection may find that, although the CAA will arrange their flights home, they have to pay again for their accommodation. Some hotel managers have reportedly demanded money from stranded consumers after hearing rumours that Goldtrail will not compensate resorts for their losses.

In this situation consumers should claim their extra expenses back using travel insurance, or under Section 75 of the Consumer Credit Act if they paid for part of their holiday using a credit card. (Find out more about how this works by reading .)

Anyone who has paid for a package holiday with Goldtrail and is being asked for extra money should contact the CAA, because the ATOL scheme protects them from having to pay again for their hotel room.

Meanwhile, if you have paid for a flight-only holiday with Goldtrail which is due to take place later this year, it is vital to find out quickly whether you will be able to get another flight to your chosen destination. If not you should set about cancelling the other elements of your holiday, which your original travel agent should be able to help you with. Then, you'll need to look into whether you can claim back the cost of doing so under your travel insurance policy. 

Problems with holiday protection

The collapse of Goldtrail has highlighted problems with holiday protection that Which? experts have been concerned about for some time.

Rochelle Turner, head of research at Which? Holiday magazine, says: ‘When the ATOL programme was first established, the majority of overseas holidays were purchased as package deals and were therefore fully protected under the scheme. Nowadays, though, far fewer holiday packages are bought and so many consumers are not protected at all.

‘The government is aware of this and has begun consultations to reform ATOL, but in the meantime it is vital for people to be aware of how any holiday they buy will be protected should something serious go wrong.

‘Always ask your travel agent or tour operator how much of your holiday, if any, is ATOL bonded – even if this means emailing their customer services department. If you find your whole holiday isn’t covered under ATOL, be sure to buy a travel insurance policy that includes scheduled airline failure (SAFI) cover and end user supplier failure, which will mean you are covered if your airline or hotel goes bust.’ Your money will also be protected if you purchase your holiday through a travel agent or tour operator that is a member of the Travel Trust Association.

Join the debate

If you would like to comment on the issues surrounding the collapse of Goldtrail, get involved in the debate at the Which? Conversation

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