Two-tier financial protection system ‘will cause confusion’

Two-tier financial protection system ‘will cause confusion’

The Package Travel Directive risks confusing consumers by introducing a two-tier financial protection system at the same time as scrapping Flight-Plus Atols.

That is the view of David Moesli (pictured), deputy director of the Civil Aviation Authority’s consumer protection group.

The directive will widen the scope of package holidays to include bookings now made under Flight-Plus Atol protection. But it will also introduce a category of ‘linked travel arrangement’ to cover so-called ‘click-through’ arrangements between linked websites.

These will require financial protection but not carry the other responsibilities that come with a package booking. In that sense, they will be like Flight-Plus, although Flight-Plus will disappear. The directive is likely to come into force in the UK by 2017.

Moesli said: “The linked travel arrangement moves us back to two levels of protection – one level of comprehensive protection and one of half-protection. Member states will have to get across to consumers that there are these two levels of protection.

“The difference between Flight-Plus and a package will be eradicated. In effect, Flight-Plus sellers will have the same responsibilities as tour operators.”

Moesli insisted of the directive: “There are improvements. We’re pleased with the amount of information to be given to the consumer before a booking, for example. That is positive.”

But he suggested governments and regulators face challenges in implementing the directive.

Referring to the proposal to regulate travel firms in the country of their establishment rather than where they sell, Moesli said: “We can look at Atol-holders at the peak [booking season] and see what the risk is.

“With this new system, a large operator could move elsewhere in Europe and, in the event of their failure, the member state would be responsible for all the holidaymakers covered across the EU.” He asked: “Could any single state deal with the failure of a big operator in high season?”

Moesli added: “There is currently cross-border trading, but in a pretty small way.

“Our ambition is to keep things as simple as possible. The intention is to try to come out with something understandable to the consumer. Our worry is about the clarity of the message for the consumer, but cost is also important.”

“Do consumers want protection? Our research shows people are interested in this even when the level of failures is low.”

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