The Package Travel regulations, which took effect from the end of December, were drawn up by the Department of Trade and Industry in response to a 1990 European Commission directive.
The regulations impose controls over package holidays both abroad and in the UK, and even catch within their net such small, non-profit ventures as the local Scout or Girl Guides' camping trip. However, the DTI seems to be almost alone in believing that its new rules adequately protect the public.
Nick Trend of the Consumers Association says: 'It's a missed opportunity. This was a classic chance for the DTI to sort out the travel industry. Instead it's a hotchpotch and very confusing for the consumer.'
The industry itself is unhappy. 'We don't think the Government has gone far enough,' says Maxine Cain, of the Association of British Travel Agents (Abta). Among other things, the regulations attempt to ensure that deposits and pre-payments for holidays are adequately protected.
This is particularly important in an industry where many firms' cash flow relies on money paid to them months before the holiday takes place.
From now on package holiday organisers have three choices for protecting deposits: a bond scheme (like that run by Abta); an insurance policy; or advance payments into a clients' trust account.
However, to the disappointment of consumer groups, the DTI did not proceed with its earlier plans to create an authority with the power to license operators and monitor their compliance with the rules. Thus the burden of checking on the thousands of package holiday companies now falls on local trading standards officers.
Bruce Treloar, principal trading standards officer with West Sussex, is sceptical of how well the DTI's regulatory regime will work, pointing out that trading standards staff have limited resources. 'Our hands are tied until we have reasonable cause to suspect an offence,' he says. 'By then the customer may already have lost money.'
Although Mr Treloar says that he and his colleagues in other authorities are planning to be proactive in monitoring holiday firms, the onus remains on customers. 'My advice to consumers is to make sure they're buying with a bonded company,' says Mr Treloar.
Discussions in the industry may lead to the creation later this year of a new single bonding arrangement for package holidays to replace the existing, confusing, plethora of schemes. A second safeguard may be to pay by credit card. Under section 75 of the Consumer Credit Act, credit card companies are jointly liable with the supplier if agreed goods or services costing at least pounds 100 are not provided to the purchaser.
This means that the credit card firm should reimburse you if, for example, your holiday firm ceases trading after taking your money.
The safest course is to book direct with the operator, using a credit card, because charge card issuers (such as American Express) are not bound by the Consumer Credit Act obligations, although in practice they may be prepared to reimburse cardholders for lost holiday bookings on a goodwill basis.
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