This webpage sets out information to update XL claimants on the claims handling process. It provides updates as new information for claimants becomes available and explains the issues that have affected our ability to handle claims as quickly as we would like.
Good progress is being made in the settlement of claims. Here is the latest information to 7th December 2009:
The majority of outstanding claims are in respect of Freedom Flights bookings. Here delays have been caused by incomplete claims where original booking documents, including ATOL Receipts, issued by travel agents have not been sent in with claims.
These documents are crucial in validating a claim and establishing the amount that should be refunded. Consequently, a claim cannot be assessed until these are provided. We are reviewing all outstanding claims writing to claimants where this information is missing.
Background to the XL failure
Freedom Flights claims
Credit card claims
Bookings made with a travel agent
Submitting in a claim - Last date: 11 September 2009
Contacting Us
XL Leisure Group was the UK’s third largest travel group and its trading arrangements were complex. The group was made up of four separate tour operators; an airline - XL Airways - and an accommodation supplier. Customers who were booked with group tour operators were generally ATOL protected, while those booking with the other parts of the group, such as XL Airways, were not.
When XL collapsed on 12 September 2008, the CAA’s priority was to ensure that customers who were abroad were not stranded and that they were brought home to the UK at the end of their holidays. This exercise took several weeks to complete as people finished their holidays.
As soon as this repatriation operation was over, the CAA turned to dealing with the estimated 240,000 customers who had advance bookings with the group who were potentially entitled to make a claim under the ATOL Scheme. Crucial to the claims process is having a complete record of advance bookings and payments received by the group’s tour operators from the Administrators. Getting this information took some time, but it is essential for reconciling payments and confirming the validity of claims.
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Freedom Direct Holidays has ceased trading. The company was both an ABTA travel agent selling travel arrangements on behalf of various suppliers, including Freedom Flights, and a tour operator selling air holiday packages under its own Air Travel Organiser’s Licence (ATOL 9740).
Prior to Freedom Direct Holidays (FDH) failure, the company agreed with the CAA that it was responsible for providing complete refunds to some customers who were due to travel with Freedom Flights. However the company did not confirm which customers had been refunded before it failed.
Consequently, CEGA, the CAA’s claims handling agent, will be contacting these Freedom Flights claimants to establish whether refunds have been made.
The CAA is reviewing the remaining Freedom Flights claims that FDH did not agree to settle to establish whether there continues to be a claim against Freedom Flights or whether FDH made the sale under its own ATOL, in which case claims should be against FDH’s bond.
The CAA will complete its review as quickly as possible and contact claimants with further advice.
It is common for consumers who book direct with a tour operator to pay for some or all of the cost of flights or holidays using a credit card.
Where customers have paid for their holiday, in whole or in part, by credit card, they have the benefit of protection under Section 75 of the Consumer Credit Act 1974, so long as the value of the holiday is more than £100 (but less than £30,000).
The CAA and ATT have agreements with most of the companies that provide credit card facilities to tour operators. These agreements divide liability for consumer protection under the ATOL Scheme between the ATT and the credit card companies.
Credit card companies are not obliged to enter into these agreements with the CAA and ATT, and the company that provided credit card facilities to XL did not have an agreement with us.
In the absence of an agreement, Section 75 of the Consumer Credit Act 1974 applies and everyone who paid for their holiday in full by credit card direct to an XL tour operator should claim from the company that issued their credit card.
The CAA and ATT have had to consider carefully with their lawyers whether they are able to pay the non-credit card component of claims where only part of the payment was made by credit card (for example if someone paid their deposit on a credit card and the balance by another method). The legal position is complex and the CAA is writing to affected customers to explain the position and to inform them how to proceed with their claim.
This process has taken time, but the CAA and ATT needed to carefully consider the issues to determine which parts of claims they would refund.
Please Note: Section 75 of the Consumer Credit Act 1974 does not cover the following situations, and therefore qualifying claims in these categories will be refunded by the ATT:
1. Claimants who booked with an XL tour operator through a travel agent using a credit card;
2. Claimants who booked direct with an XL tour operator using a debit card; and
3. Claimants who booked using ONLY a debit card and/or a cheque payment.
Where bookings are made with a travel agent, the CAA must take extra care to check that the agent issued the correct documents to customers when they booked, and that the travel agent has actually paid the customer’s money to the failed tour operator. Provided this is the case, customers’ claims for a refund can be considered under the terms of the ATOL Scheme.
The unusually high number of customer claims of this type and the size of the XL failure has meant this process has taken longer than usual.
Delays can also occur if a travel agent does not provide to the CAA all the original documents that were issued at the time of booking, or where money collected from customers and due to an XL tour operator was not paid over before the failure took place. Where this is the case, the CAA cannot settle a claim until the agent sends customers’ money to the group’s Administrators.
More information about claims payment policy.
Important Information
Under the terms of the Air Travel Trust payment policy, the CAA can only pay valid claims that are received by it within 12 months of the date of failure. Therefore the CAA will no longer be accepting claims arising from the failure of the XL Group.
Referral Letter for Credit / Debit Card Payments made directly to XL.com. If you paid direct to XL.com with a credit or debit card, please forward this referral letter to your credit card company or bank with your claim.
We are continuing to receive a large volume of calls and our lines are very busy. If you need to contact us about your claim, please use the contact information and claim reference provided in our acknowledgment. If you have not received an acknowledgment, please use the information shown here. Please be patient if you are not able to get through straightaway.
You can also e-mail us: claims@caa.co.uk .
ATOL Claims DepartmentK3 CAA House45-59 KingswayLondon.WC2B 6TE
(between 9am - 5pm - Monday to Friday)
Travel City Direct Claims:020 7453 6350
CEGAATOL Travel ClaimsPO Box 127ChichesterWest Sussex.PO18 8WQ
(between 9am - 5.30pm - Monday to Friday)
Freedom Flights Claims:01243 621 009
Kosmar & Aspire Claims:01243 621 444
Providing proof of payment
When making a claim it is important to include bank or credit card account statements that identify the account holder and the account number so that these details can be verified against a booking.
If claimants delete this information this process cannot be completed and any refund will be delayed.
Travel insurance premiums paid to XL
The ATOL Scheme does not cover travel insurance premiums paid to ATOL holders. This is because customers’ contracts are with the insurance provider and they have benefited from the cover provided from the point when the policy was purchased. This applies also in cases where only a deposit has been paid.
Customers are advised to contact their insurance provider about whether they can transfer their policy to another holiday or whether a refund can be made.
Booking amendment and cancellation fees charged by XL
Administration fees charged by XL for changing a booking at the customer’s requests, such as changing or adding a name, are not refundable from the ATOL Scheme. This is because XL has already provided the service charged for.
Club card points
Refunds under the ATOL Scheme can only be made in relation to customers’ monetary payments and subsequent financial losses incurred as a result of a failure. The CAA does not refund reward points or vouchers that have not been purchased. Customers are advised to contact their reward points or vouchers provider.
Claims assigned to travel agents
The ATOL Scheme protects customers’ payments in respect of their original holiday or flight cost charged by an XL tour operator. The CAA cannot refund any extra charge for the substitute holiday booked by a travel agent or any credit card fees charged by the agent.
For more information about making a claim read our Claims FAQ
