Holidaymakers lose refund certainty as Abta dumps guaranteed safety net

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Holidaymakers who book trips through travel agents can no longer be certain their money will be refunded if the firm goes bust. The Association of British Travel Agents (Abta), which has long operated a financial protection scheme offering 100 per cent refunds to customers of its members, yesterday downgraded the guarantees it offers.

Abta said it would withdraw from the Consumer Codes approval scheme run by the Office of Fair Trading (OFT), because it could no longer promise that all customers would be protected by its financial protection scheme.

The Abta scheme has until now offered full refunds to customers who lose money when their travel agent goes under. It also guarantees they will be able to continue their holidays if their agent goes bust while they are away. But from yesterday, customers who lose out because their travel agent fails to make a booking on their behalf before going under will no longer be protected. The financial protection scheme will also no longer apply to holidaymakers who book accommodation from an online supplier through a travel agent.

Abta advised holidaymakers to protect themselves by insisting on written confirmation from travel agents that their bookings have been made. It said the second change was being introduced because of pressure from members competing with non-Abta suppliers that do not have to comply with the codes. Sean Tipton, a spokesman for Abta, said: "We are trying to stress that we do still have a very rigorous code of conduct and financial protection scheme."

However, the OFT warned the changes would mean that some customers who were previously protected from a travel agent's bankruptcy would now be at risk of losing out. Colin Brown, the OFT's director of market transformation, said: "We are disappointed that Abta has taken the decision to change its code and withdraw from the scheme."