Sort out your paperwork, claims-handling review tells agents

Sort out your paperwork, claims-handling review tells agents

A review of delays in handling consumer claims following travel company failures has called for improvements in the paperwork issued by travel agents.

The report by former chief financial ombudsman Walter Merricks was commissioned by the Civil Aviation Authority (CAA) last May following the collapse of XL Leisure Group in 2008 with up to 200,000 bookings.

Published today, the independent report concludes the CAA should simply the process for validating claims under the ATOL scheme that provides financial protection to holidaymakers after many claims took months to settle.

It recommends the CAA consider using online technology and tracking systems, improve its preparations for a large-scale future failure and work with the industry to improve agents’ documentation.

Merricks said: “This report represents my own assessment of what ought reasonably be put in place to provide an appropriate service to ATOL claimants. Many of my recommendations have already been addressed in part by the CAA and in part through government proposals to reform ATOL. I look forward to seeing further improvements over the coming year.”

The review comes ahead of proposed reform of the ATOL regulations to create a ‘flight plus’ Atol to extend protection to retail sales of dynamically packaged holidays.

The Department for Transport is finalising a consultation document on the detail of these proposals, with the CAA moving to introduce an ATOL Certificate for issue to holidaymakers.

CAA director of consumer protection Richard Jackson said: “A number of points raised have already been addressed and we have published an Action Plan setting out how we will respond to others.”  

But he added: “As highlighted in the report, the CAA alone cannot resolve all the problems. The travel industry has a major role to play in ensuring paperwork issued to consumers improves, removing the need for complex and prolonged claims management.”

The Air Travel Trust (ATT), which manages consumer-protection funds, amended its payment policy from May 1 to make clear it will not pay out to customers of agents that fail to comply in full with the regulations.

The ATT said it had been forced to spend “considerable time and effort on claims where documentation was confusing or failed to correctly identify the extent to which customers were protected by ATOL”.

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