The CAA has forced out of business two travel companies suspected of trading illegally, it was revealed at the weekend’s Travel Network Group conference.
Andy Cohen, the head of Atol at the regulator, told agents his board had given him a clear instruction to actively pursue firms who are found to be flouting Atol law.
Now that the UK had put in place clear new laws following last year’s Flight-Plus reform, the CAA feels it has a secure mandate to go out and vigorously enforce them.
Primarily the law states agents must have agency agreements in place and they must produce Atol certificates for their customers and give those to them as soon as any money changes hands.
Cohen said: “The CAA board has instructed me to find companies which are not complying and give them advice in the first instance but if they do not comply to prosecute them.
“We have taken two companies out of business recently which were not complying. Our primary role is to make sure consumers are protected.
“There are laws in place and those laws have got to be followed – you will see more of that [enforcement] going forward.
“You are the guys who comply. What you want, in return for APC and Atol fees, is for us to find people who are not and prosecute them and take them out of business.”
It is understood the two firms, which have not been named, opted to forfeit their Atol licences after the CAA started investigations about them breaking the rules of the licence.
Cohen said the CAA was working on introducing a new delegated claims procedure under which agents can make the claim on behalf of customers and get paid for doing so.
Currently the CAA pays an agency for administering claims and this slows down the process of getting the money into the right hands.
“At the moment it goes to a claims company and we pay them out of your money while you are doing all the work and consumers are not getting their holiday,” Cohen said.
“In the future, if you wish, you can do the claims yourself and we will pay you the money instead of the claims agent.
“You will get the money back quickly and you can get your consumer a new holiday.”
Another development to help with this has been the insertion of a clause in Atol agency agreements that any money held by a failed company can be seized by the Air Travel Trust Fund to repay clients.
This keeps it out of the hands of administrators and ensures customers do not just join the list of company creditors with the likelihood they will receive just a portion or none of their money back.
Cohen said this change to agency agreements needed to be done although he said he appreciated it has caused operators issues because they have had to re-issue thousands of agency agreements.
The oversight had been spotted shortly after the original standard terms of agency agreements were released but the CAA decided to delay its implementation to minimise disruption.
“It was a technical change, but it needed to be done. It is for the benefit of the industry so they have money in their fund if and when it has to pay out.
“We appreciate it has caused some issues but we left it as long as we could.”
TTA agent Helder Lemos, managing partner of Gallivant Travel, said he was now more assured that the CAA was on the side of agents acting within the law.
“As an independent agent I actually feel I get what Atol is trying to do. Up until now I always felt that the level playing field was a bit of a promise and not going to happen.
“But for the first time I saw the big picture. Go back to the Travel Republic case and I thought there was a bit of a knee jerk reaction and it was unfair everyone was in the firing line.”
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