CAA consultation: ATOL reform part 2, CAP 2496 - Which? Response

Summary:

• Which? is broadly supportive of the CAA’s proposals to strengthen the ATOL consumer protections and the objectives set out for this call for evidence. However, there are major issues that the proposals do not address or acknowledge, including recognition of the airlines non-compliance with consumer protection laws1, the CAAlack of effective enforcement powers and the disproportionate regulatory burden placed on ATOL holders vis a vis the airlines, and the impact this has on competition in the sector.
• Which? is keen to collaborate with the government, the regulator and industry on this reform initiative but urges the Department for Transport (DfT) and CAA to broaden the scope of the consultation to consider the consumer perspective and expectations of the scheme, as well as the changing consumer attitudes to booking holidays and how the market has evolved over time, particularly as research shows that confusion over what types of holidays and flights are ATOL-protected may leave consumers at risk of financial detriment.
• For a number of years, the CAA has been asking the government to reform its enforcement powers with a civil sanctions regime that it can apply itself. Which? strongly supports these calls as we believe that consumer protection rules need to be backed by a strong and effective public enforcement system with regulators that have the right set of tools and resources to use their powers effectively and swiftly.
• To restore confidence in this sector, the government should strengthen the public enforcement system and deliver a fair and coherent approach to consumer rights in this sector by bringing forward legislation that will grant the CAA administrative fining powers for breaches of consumer law. We believe that the government should prioritize consumer-friendly reform at pace and establish an airline insolvency mechanism as part of this ATOL reform.

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