p10-11 CIMTIG July3 1/7/09 21:13 Page 11
ttglive.com
conference report news
Cimtig debate • June 26 • London
AGENTS.
Abta won’t
alter rules
ABTA admitted it had added to confusion over
financial protection but said it will continue to
advise members who sell holiday components
separately that they do not need to protect
customers.
Head of finance Mike Monk said it changed
its rules to allow members to choose to not Mike Monk: “If there was one simple answer, we’d have found it by now”
protect 18 months ago after complaints that
non-members had a competitive edge. “What we said was, if you choose not to if this is to be put right there is really only one
Abta member Travel Republic, which has been protect a customer because you are selling a place this can be done. If the government does
taken to court by the CAA accused of breaking single element we will allow you to do that, but not step in it will never be put right.”
Atol rules, has always claimed Abta had you must make it crystal-clear to the consumer But Monk said the government was showing
endorsed its sales procedures. that’s what you are doing. little appetite for changing the system and was
Monk said the Abta advice will remain until “Until and unless the government step in and unlikely to find a simple answer, adding: “We have
such time as the law is changed, but added: “I change the law we will continue to do that. all been looking for one simple answer for years.
have to admit this has added to the confusion. “We all know how confusing it is out there but If there was one we’d have found it by now.”
COST. PRINCIPAL STATUS.
Travel firms ‘must pay’ for protection
Association clarifies its
stance on principals
THE INDUSTRY will have to accept that protecting clear definition of a package. If that was not
the consumer costs money and must ensure firms found quickly, the banks and financial institu- ABTA head of finance Mike Monk defended the
are not able to avoid having to provide protection. tions behind credit cards would impose tight association against criticism over its failure to
AGB Associates’ Alan Bowen said some firms financial restrictions on the industry, he warned. impose agency law and force principals to
were “intent on avoiding financial protection” Gary Lewis, Travel Trust Association opera- honour Freedom Direct bookings.
but claimed customers were prepared to pay to tions director, agreed that the cost of financial Alan Bowen (pictured) accused
protect their payments. protection had to be borne by the industry. Abta of being unable to make sup-
“Some of the industry is intent on avoiding “Retailers and their associations should not pliers honour bookings, leaving
financial protection. They do that because if they seek to pass on the responsibility to suppliers or consumers with the only option of
can avoid saying they are a package organiser the banks,” he said. claiming through their credit cards.
they can avoid VAT and Toms, and gain a financial Lewis warned that merchant acquirers such as But Monk said: “The reality is if
advantage over their competitors.” Barclays, E-Clear and Lloyds Cardnet had been an Abta principal fails to honour a
Bowen said a new system was needed that hit by the failures of XL and Freedom Direct and contract they will be put before a
covered all prepayments and was based on a were starting to take a more risk-averse view. code of conduct meeting.
“Abta does stand for something.
We pay out £3 million a year to compensate
TRUST ACCOUNTS.
consumers.”
TTA defends security of its trust account system
The Freedom collapse highlighted the
different ways bed banks operate – as either
BOTH Abta and the TTA agreed trust accounts, Abta has always refused to sanction trust principals, agents or suppliers – and last week
although a legal way to meet the requirements accounts because, explained Mike Monk, Abta was forced to reiterate its rules.
of the EU package travel regulations, have “when companies get into trouble they raid the Many bed banks state they are acting as an
potential security risks. trust account”. agent for the hotel and a booking is made only
However, the TTA insisted its trust account However, Gary Lewis, TTA operations director, once it has received the money.
arrangement was secure and went beyond said it imposed strict rules of transparency Abta will protect pipeline monies to principals
the EU directive’s requirement to offer 100% and independence of account signatories, and up to a cap of £100,000 even if the supplier has
protection for its members. provided a guarantee for its trust accounts. not received the money from the agent.
03.07.2009 11
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