The UK Civil Aviation Authority (CAA) has launched a legal investigation and advised anyone booking trips on lowcostholidays.com that their bookings may not be financially protected and even if they are, that protection will be extremely limited.
The advice follows Lowcostholidays’ move to Majorca on 1 November 2013, which means bookings now made on their website are not protected by ATOL – the UK’s holiday financial protection scheme. The company claims bookings are voluntarily protected under the Spanish financial protection system, but the CAA’s legal view is that even if the bookings are accepted under the Spanish system, the value of the protection offered is extremely limited.
The CAA has serious concerns about the risks posed to consumers by Lowcostholidays’ conduct, and is using its legal powers to gather more information to protect consumers from being misled.
Andrew Haines, Chief Executive of the CAA, said:
“Consumers have the right to be treated fairly and given clear information about how their booking is financially protected. Lowcostholidays hasn’t done either and is still leaving consumers in the dark about the real level of protection their bookings come with. We believe this is a completely unacceptable way to treat UK consumers.
“If you book a holiday on lowcostholidays.com, you won’t receive ATOL protection. In fact, our legal view is that you may not have any protection at all and even if you do, the protection the site claims to offer is extremely limited. So consumers looking to book with the company have to ask themselves whether they are happy to take that risk or not. We are now using our legal powers to protect consumers and make sure they are not misled.”
Alongside beginning a legal investigation, the CAA is publishing the following advice for anyone who has booked on lowcostholidays.com, or is considering doing so in future:
• Bookings made on lowcostholidays.com since 01 November 2013 are not protected by ATOL.
• The CAA has taken steps to understand the Spanish financial protection system, where Lowcostholidays say their bookings are protected. The CAA’s legal view is that anyone booking on lowcostholidays.com may not have financial protection and even if they do, that protection will be extremely limited.
• Even if passengers are protected (which would most likely be for a Spanish court to finally determine) the protection under the Spanish system is not the same as ATOL. For example, unlike the ATOL scheme, passengers protected under the Spanish system are not repatriated home in the event of travel company failure whilst abroad.
Anyone booking holidays without financial protection is at risk of being left out of pocket or stranded abroad if their travel company collapses. More advice about the differences between ATOL and the Spanish financial protection system are available here.
For more information contact the CAA press office on: 020 7453 6030.
Follow the CAA on Twitter at @UK_CAA
Follow ATOL on Twitter at @packpeaceofmind
More information about the ATOL scheme is available from www.packpeaceofmind.co.uk.
Notes to Editors
1. On 06 November 2013, the CAA confirmed that any Lowcostholidays customers who booked before the company transferred its business to Spain and received an ATOL certificate, would continue to be protected by ATOL. More information is available here.
2. Lowcostholidays Ltd used to hold an ATOL. It was licensed to carry 263,685 passengers a year.
3. Under the European Council Directive 90/314/EEC of 13 June 1990 on package travel, package holidays and package tours, countries are able to choose how to implement financial protection arrangements for package holidays. The Spanish system devolves responsibility for protection arrangements to regional authorities. In this instance, the Balearic Islands are responsible for protecting packages sold by lowcostholidays.com.
4. Bookings made with lowcostholidays.com using credit cards registered in the UK may have some protection from their card issuer for some parts of their holiday where the amount charged is more than £100.
5. In the UK the Air Travel Organiser’s Licence (ATOL) meets the UK’s requirements to protect air package holidays and protects people against the risk of their travel company going bust: ensuring they can continue their holiday and return home safely if the company collapses whilst they are away; or providing refunds if they’re yet to travel.
6. Run by the UK Civil Aviation Authority on behalf of the Government, ATOL covers the traditional package holiday, some individual flights and holidays known by the industry as ‘Flight-Plus’. A ‘Flight-Plus’ booking is one that includes a flight plus accommodation and/or car hire, so long as these separate parts of the holiday are requested within a day of each other.
7. The CAA is the UK's specialist aviation regulator. Its regulatory activities range from making sure that the aviation industry meets the highest technical and operational safety standards to preventing holidaymakers from being stranded abroad or losing money because of tour operator insolvency.