Financial Protection explained.

Hilary Alexander on 13 June 2018
Booking a holiday and then counting down the days until you can set that ‘out of office’ on your work email account is one of the most exciting times of the year, isn’t it? We look forward to making those memories for so long. But how protected are you? And how much do you really know about it?

Having the peace of mind that no matter what, your holiday is safe is priceless and it’s not something you can find everywhere. But the minefield of financial protection is not easily negotiated so we’re trying to make it clearer to help preserve your precious holiday funds.

Why do I need to worry about financially protecting my holiday? In short, if you don’t and something happens to one of the companies involved in your trip, you could lose out.

If you’ve booked a package holiday, your holiday is financially protected. If you’ve booked your flight and accommodation separately and one of the companies fails, you could end up in a situation where you’re having to pay for an alternative flight or accommodation.

Even if you book accommodation with a travel agent, if they fail, you could end up losing your money and be left without your hotel room. Your holiday insurance isn’t fail-safe either, as it isn’t guaranteed to cover a travel company going bust.

Read on to understand more about the financial protection available for your holiday…

What are the different types of financial protection? ATOL ABTA Section 75 Insurance Independent protection

What is ATOL?

The Air Travel Organisers’ Licensing (ATOL) regime is a financial protection scheme for holidaymakers regulated by the Civil Aviation Authority (CAA). In the UK, all travel companies selling package holidays with flights must hold an ATOL. If the company isn’t registered in the UK, they aren’t legally required to hold an ATOL and you might find you aren’t as covered as you thought. And unfortunately, by that stage, it’s probably too late.

If a travel company with an ATOL stops trading, the ATOL scheme protects all customers who had booked with that company. If the company goes into administration before you travel, your money is protected, and you’ll be able to apply for a full refund. If you’re on holiday when the travel company goes bust, the ATOL scheme guarantees you’ll be able to finish your holiday and return home.

When you book a protected holiday, you’ll receive an ATOL certificate as soon as you pay for your trip. The certificate explains how you’re protected and what to do in the event of a company collapsing.

If the company is a registered member, you’ll spot the ATOL logo and a four or five-digit number on their website and in brochures and adverts. (You can also check that the company is an accredited member of ATOL on the Civil Aviation Authority’s website)

My travel agent is an ABTA Agent. What is ABTA?

If you’ve booked a package holiday from an ABTA agent, your money is protected. However, you might not be financially protected if you haven’t booked a package holiday. You will need to speak with your travel agent if you are relying on this level of protection.

I paid for my holiday using my credit card. If the travel company goes bust can I claim through my credit card provider? (Section 75 of the Consumer Credit Act 1974)

If you’ve booked your trip and have paid on your credit card, you might be able to make a claim against your credit card company. This claim is under Section 75 of the Consumer Credit Act 1974, so you might hear people talk about “section 75”.

Section 75 of the Consumer Credit Act 1974 applies to goods and services paid for with your credit card and includes online bookings. If you’ve paid for your travels using your credit card, it means that you can claim against the creditor, which in this case is the credit card company.

To make a claim against your credit card provider, the amount you’re claiming for must be between £100 and £30,000. However, you may still be able to make a claim if the amount on your credit card is less (a deposit, for example) as the claim against the credit card provider is directed at the total cost of your trip.

One Travel Counsellor helped a group of 25 when the travel company they booked their holiday with went into administration: “They thought all was lost as they had planned a Christmas in the sun and after my advice they have instigated section 75 on their credit cards.”

If you paid using a debit card, you may be able to use chargeback to claim some or all the money back. You will need to contact your card provider and speak to them about your claim.

Doesn’t my travel insurance cover me if the company I’ve booked with goes into administration?

Not every travel insurance policy will cover you if a company goes bust, so it’s best to read the small print and check with your travel insurance provider.

It’s also worth checking whether the provider will cover you for the whole holiday if you’ve booked your flights, accommodation and car hire separately. As an example, you might find that your travel insurance will cover you if the airline goes into administration but that you can’t claim for a refund on your accommodation or car hire. If you’ve booked through Travel Counsellors, your holiday is 100% financially protected so your money is safe. In the event of an issue, your personal Travel Counsellor will contact you to discuss the options available, such as travelling to a different destination or changing your flights to another airline carrier. In many cases, our customers don’t even need to know when a company has gone bust – we just do the necessary work behind the scenes.

Is my money 100% safe when booking with Travel Counsellors?

Yes. And it’s the highest level of protection you could wish for because it’s fully independent. Set up in 2004, it sits alongside our ATOL cover and financially protects every part of every trip, whether it be the whole holiday, a flight, hotel stay, car hire or even airport parking. It’s completely robust meaning no matter what happens, your money is safe.