‘Which? overstates refunds due’ Ian Taylor

Which? has been accused of “overstating” the amount of outstanding refunds for cancelled holidays following its latest broadside against the sector. The consumer organisation

claimed that “over £1 billion is being illegally withheld” from consumers in refunds “out of more than £8 billion worth of package holidays to have been cancelled”. Which? Travel editor Rory Boland

demanded the Competition and Markets Authority (CMA) “take firm action” against companies that “continue to flout the law”. Yet Ryanair chief executive

Michael O’Leary made clear this

week there would be “no cash refunds” unless flights are cancelled, despite the new lockdown. A senior industry source

confirmed the Which? figure of £1 billion in refunds outstanding is “probably not far from the truth” but pointed out: “That includes refund credit notes which are protected. A big chunk of it would be future cruise credits, which are protected. “These are a genuine choice for

customers. They give the customer extra value and help the industry. “We do have airlines, and some

travel companies, being really slow [to refund]. But with packages, the money is protected. Which? is overstating the danger to consumers and painting a picture as though it’s

Abta: Bonding renewal was no ‘bloodbath’

Ian Taylor

Abta has rejected allegations it has “increased bonds when companies can least afford it” to protect its own insurer. Chris Photi, head of travel and

leisure at White Hart Associates, described Abta’s September bonding renewal as “a bloodbath” and said: “Abta is seeking to protect its captive insurer and the only way to do it is to increase bonds.” A captive insurer is an insurance company owned and operated on behalf of

6 5 NOVEMBER 2020

those it provides insurance for. Photi told a Barclays travel

industry webinar: “Abta is fighting to increase bonds when companies can least afford it to protect a post-Thomas Cook captive insurer. “How much does the captive

insurer hold? It had £22 million, but we’ve had Thomas Cook and other failures since then.” He argued: “Abta needs to be

more transparent.” Abta director of financial services

John de Vial rejected the allegations, telling Travel Weekly: “Thomas Cook

did not cost Abta a penny. There were no costs in excess of the bond. It’s a completely unfounded concern. “It’s not unreasonable to ask ‘is

there a problem?’ But the answer is ‘no’. There was no cost whatever to Abta from Thomas Cook.” De Vial rebuffed the allegations

of a lack of transparency, saying: “We publish consolidated financial statements every year on the Abta website before Christmas. We will do the same this year.” He also rejected the claim that Abta had ratcheted up members’

The £1bn figure includes RCNs and future cruise credits, which are protected

wholly involuntary when it isn’t.” The CAA described its

confirmation on October 23 that Atol-holders can continue to issue refund credit notes (RCNs) with Atol protection, but only up to December 31, as “appropriate”. CAA consumer director Paul

Smith told Travel Weekly: “We considered it appropriate to offer short-term Atol protection to refund credit notes. Considering Atol protection for refund credit notes

ends on September 30, 2021, we feel the decision to extend this until the end of December is appropriate.” O’Leary rejected criticism of

Ryanair’s behaviour on refunds, insisting: “Ryanair will not pay cash refunds when flights operate. People do not have a cash refund option if the flight is operating. They can rebook.” He added: “We’ve refunded

€1.5 billion. We have no backlog. People who claimed a refund last week have been refunded. The only people left are those who have not applied direct to us, who booked with a screen-scraping OTA. If customers made bookings through screen-scraping sites, they can obtain

a refund direct from us.” i Business, back page

John de Vial

bonding requirements, saying: “It is not Abta arbitrarily hoicking bonds. This starts with the legal position. Businesses have to provide sufficient funds to protect consumers. “You don’t need an increased

bond because failure is more likely, you need an increased bond if more money is being held, if customers are keeping their options open allowing companies to hold their money. What is driving it is compliance with the law. If there aren’t sufficient funds when someone fails, it would be a disaster for confidence in the sector.”

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