Freedom Direct failure highlights need for clarity on ATOL bonds

Freedom Direct failure highlights need for clarity on ATOL bonds

Advantage chief executive John McEwan has said the failure of Freedom Direct Holidays highlights the need for clarification on the obligations on agents to acquire an ATOL bond.

Freedom Direct, an online and call centre agency and operator, went into voluntary liquidation but has now been acquired by Hays Travel and continues to trade. Previously it traded as a member of the Advantage consortium.

McEwan said the costs of acquiring a bond in the current climate put extra pressure on agencies, and could have impacted on Freedom Direct.

He said: “I can’t help thinking the obligations of getting a bond was a contributory factor; it’s not easy these days and can work out quite expensive.

“We were quite surprised by what happened. Freedom was trading profitably and had a good set of accounts and balance sheet. It comes down to a broader issue about putting bonds in place, which is something that needs to be looked at.

“You cannot help feeling that Freedom went down the route of getting an ATOL and met all the obligations, whereas there are other agents trading without an ATOL and yet doing the same sort of business.”

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