The Association of Atol Companies (AAC) is appealing for agents and suppliers to get in touch to “urgently” agree a new scheme for balance payments following the collapse of Thomas Cook.

Last month the association launched a “wholesale review” into when customer money is collected by agents and passed on to suppliers after it emerged some of Thomas Cook’s retail agents had taken full customer payments well in advance of departure and not passed them on to suppliers.

Some operators lost “substantial amounts of money” as a result, according to the AAC’s legal advisor, Alan Bowen.

Travel Weekly revealed Thomas Cook had been offering customers a 5% discount in August and September in return for full monies up front for holidays due to depart up to nine months later.

Bowen said the practice “could not continue” and warned some operators could look to sell more direct.

Chair of the AAC and general manager of Newmont Travel, Lindsay Ingram, said: “We would welcome discussion with travel agents and other Atol holders with the urgent aim of finding a mutually acceptable solution because we cannot continue with the current clear lack of trust which the recent failure of Thomas Cook has left us with.”

Bowen added: “It appears (Cook) staff were incentivised to give customers discounts or promises of money cards to extract funds far in advance of the due date.

“We are looking at alternative ways of working, some of which would adversely affect agents and this is an issue we want to avoid.

“We could insist on funds being held in trust in a similar fashion to Iata, or require customers to pay direct to operators with commission being refunded, a policy chosen by a number of cruise lines at present.

“Had there been online Atol certificates, and had they identified the funds collected, a lot of the pain our members are suffering could have been avoided.”

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