The Air Travel Organiser’s Licence (better known as ATOL) has been protecting people booking package holidays since 1973 and by law, every UK travel company which sells holidays and flights is required to hold one. That means that if your overseas holiday was booked with an ATOL member then you can apply to the Civil Aviation Authority (CAA) for a full refund before you’re due to travel. If you’re already on holiday when the company goes bust, the CAA will repatriate you.
As the UK’s largest travel association, ABTA represent travel agents and tour operators that sell over £37bn of holidays and other travel services, ensuring they keep to a strict code of conduct to maintain high standards. For the traveller, they also offer financial protection if a holiday company goes bust. So if your holiday is a land- or sea-based package, such as on a coach, cruise or railway, and booked from an ABTA member, then your money is protected.
Situations such as your holiday firm going bust are one of the main reasons to buy travel insurance as soon as you have booked your holiday. Depending on the policy you take out, you can cover yourself against companies going out of business, as well as the cancellation of your holiday for medical or other reasons.
Credit card protection
If you haven’t got travel insurance in place at the point when your holiday company goes bust, you may be able to claim back your money through your credit card company. To be eligible, you need to have paid more than £100 for your holiday or flights and booked directly with the holiday company or airline. If you paid by debit card, you may be able to claim through the Mastercard and Visa Chargeback scheme, which most high street banks have signed up to. This allows you to ask your card provider to reverse a transaction on your debit card, giving you your money back.
Booking a package holiday is one of the safest ways to secure your money in case your holiday company goes bust. As long as the company is ATOL-registered – which most travel companies in the UK are – you will receive a full refund from the Civil Aviation Authority. However, if your holiday company is based abroad and not ATOL-registered, you will need to turn to your travel insurance company to make a claim, or, if you don’t have insurance, call your credit card company – as long as you booked with a credit card.
Flights with accommodation or car hire
To reflect the changes in the way people book their holidays, the ATOL scheme was changed in 2012, and now covers all overseas holidays where the flights and accommodation or the flights and car hire have been booked on the same day or within a day either side (called ‘Flight Plus’).
The ATOL scheme applies to flights only when you don’t receive your tickets immediately. However, you’re not protected by ATOL if you book a flight directly with an airline or via an airline ticket agent. If this is the case, you will need to register a claim with your travel insurance or credit card company to recoup your money.