Abta seeks clarity by ditching non-Atol optional protection

Abta seeks clarity by ditching non-Atol optional protection

Abta is proposing a change in its rules that would require all principal members to bond all product even if not required to do so by law.

Currently members have an option whether to bond certain types of ‘non-licensable’ product such as accommodation-only, car hire or sporting activities like golf.

But the association has written to members to get their views on the change it says the board is in favour of and would make the situation clearer for consumers.

A letter from John de Vial, Abta head of financial protection, states: “The Abta brand is widely recognised by consumers as a badge of trust and confidence.

“Changes to the holiday market in recent years, as well as the accompanying regulatory changes , have created a system of financial protection in the UK that is not clear for consumers.

“A number of members have expressed an interest in making the position clearer in order that consumers and members have certainty that travel arrangements provided by an Abta member as principal are protected.

In a later section headed “What is the view of the Abta board?” the letter states the board “believes that there could be real competitive advantage for all Abta members in making the changes being considered”.

It goes on: “All principal members would be able to advertise both their membership of Abta and the financial protection of ALL (sic) of their travel arrangements.

“Abta would also be able to make much stronger and simple statements in relation to financial protection.”

Abta estimates that despite giving members the option not to bond non-Atol, non-package product, 86% of principals protected all such product in 2012 representing 97.8% of turnover.

However the bonding requirement change, if brought in, will require some firms to add this product to their bonding with Abta, increasing their costs.

The move will be seen as a vindication of criticism of Abta over claims about the protection it and its members offer that were said to be misleading.

Chief among the association’s critics has been David Speakman, chairman of non-Abta travel agency Travel Counsellors.

He has been angered by Abta members using terms like ‘fully bonded’ on their websites when the reality is all agent members sell a mix of protected and not-protected product.

On Twitter this week Speakman questioned the association’s integrity and described as ‘shameful’ a passage in a recently produced promotional flyer entitled ‘Why Book with an Abta Member’.

He says the wording and claim that Abta protects 3.7 million holidays a year and paid out £19 million to protect customers last year was misleading.

Speakman has argued this perpetuates the widely-held belief among the public that the association still offers a 100% financial guarantee, something it scrapped in 2007.

Speakman won significant backing for his views from the CAA and Office of Fair Trading in March which issued new guidance on the information firms give to customers when selling holidays.

The joint OFT-CAA statement issued after a 10-week consultation said: “Information on the financial protection arrangements for the booking and other key information must be made clear to consumers.”

The revised guidance says: “If you are an Atol holder, and some of the products you sell are not Atol protected, you need to be clear with customers which of your products are Atol protected and which are not.”

And also: “If you are selling a holiday in separate parts ... you must also be clear about the financial protection that applies to each of these arrangements.”

An Abta spokesperson said: “Abta is currently talking to a number of members about some potential changes to aspects of its financial protection rules.

“This research specifically relates to travel arrangements sold by members as principal which are not currently required to be financially protected by law.

“We are talking to all members who may be impacted by any potential change. These discussions will assist the Abta board in assessing the impact of any changes to its rules.

“The research will be conducted over the next few weeks for consideration by the Abta board in due course.”

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