Package holidays refund muddle

AS MANY as eight out of 10 unbonded travel companies are ignoring new government rules by failing to provide financial protection for package holidaymakers, Independent on Sunday inquiries have revealed.

The travel trade fears that the collapse last month of the unbonded French self-catering specialist, SFV Holidays, leaving 600 people without a holiday or a refund, could be the first in a string of failures.

At the beginning of the year the Government introduced a new law enforcing an EC Directive on Package Travel under which anyone who buys a travel package is guaranteed a refund or free repatriation if the operator goes bust.

Ratification of the directive theoretically supported the concept of universal protection for travellers in the wake of last summer's collapse of the unbonded coach company, Land Travel of Bath.

But the Department of Trade and Industry failed to provide a way of enforcing the legislation. Trading standards officers who were handed the job of policing it said they lacked the manpower and resources to do so.

The main travel trade associations, including Abta (Association of British Travel Agents) and Aito (Association of Independent Tour Operators), said the DTI plan was 'botched'. Letters from Michael Heseltine, President of the Board of Trade, which have come to light in the wake of the SFV failure, have renewed the controversy.

Shortly before SFV collapsed, its director, John Cullom, asked his MP, John Patten, whether the company needed to be bonded. Contrary to previous direction from his department, Mr Heseltine wrote to Mr Patten that SFV was a borderline case.

The regulations define a package as being made up of two of three components at an inclusive price: transport; accommodation; and 'other tourist services'. SFV's brochure clearly offered ferry-inclusive packages, which would require it to be bonded, so Mr Heseltine's action is being interpreted as an effort to reduce the number of companies who fall under the legislation.

Up to 30,000 UK travel companies should be offering financial protection under the EC Directive. However, Abta and Aito estimate that more than 15,000 of them have not bothered to provide financial protection.

Abta, Aito, the Bus and Coach Council and the Civil Aviation Authority, which require bonding, account for about 8,000 companies. The rest are supposed to organise insurance or special bank accounts for clients' money to trade legally.

The Independent on Sunday phoned a selection of companies advertising prominently in national newspapers. Eight out of 10 had no protection.

Patricia Kenny of Italien Tours said that she had tried to make the necessary arrangements with her bank 'but they don't know anything about it'. 'One wants to do the right thing. But in fact it's only a very small number who won't book with us when they find out we aren't bonded,' she said.

Aito's chairman, Noel Josephides, said: 'I find it alarming that the Government can allow already flawed legislation to be cracked wide open so soon after its implementation. Consumers' money is seriously at risk.'

A spokeswoman for the DTI said: 'This is the responsibility of the trading standards officers. We have nothing more to say.'

News
peopleHowards' Way actress, and former mistress of Jeffrey Archer, was 60
Sport
Romelu Lukaku puts pen to paper
sport
News
Robyn Lawley
people
Arts and Entertainment
Unhappy days: Resistance spy turned Nobel prize winner Samuel Beckett
books
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
people
Life and Style
Troy Baker and Ashley Johnson voice the show’s heroes
gamingOnce stilted and melodramatic, Hollywood is giving acting in video games a makeover
News
i100
Life and Style
Phones will be able to monitor your health, from blood pressure to heart rate, and even book a doctor’s appointment for you
techCould our smartphones soon be diagnosing diseases via Health Kit and Google Fit?
News
people
Extras
indybest
Travel
Ryan taming: the Celtic Tiger carrier has been trying to improve its image
travelRyanair has turned on the 'charm offensive' but can we learn to love the cut-price carrier again?
Sport
Usain Bolt confirms he will run in both the heats and the finals of the men's relay at the Commonwealth Games
commonwealth games
Life and Style
Slim pickings: Spanx premium denim collection
fashionBillionaire founder of Spanx launches range of jeans that offers 'thigh-trimming construction'
News
Sabina Altynbekova has said she wants to be famous for playing volleyball, not her looks
people
News
i100
Life and Style
tech'World's first man-made leaves' could use photosynthesis to help astronauts breathe
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

SAP Project Manager

competitive: Progressive Recruitment: SAP PROJECT MANAGER - 3 MONTHS - BERKSHI...

SAP Project Manager

competitive: Progressive Recruitment: SAP PROJECT MANAGER - 3 MONTHS - BERKSHI...

Senior Investment Accounting Change Manager

£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...

Microsoft Dynamics AX Functional Consultant

£65000 - £75000 per annum + benefits: Progressive Recruitment: A rare opportun...

Day In a Page

Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices
Could our smartphones soon be diagnosing diseases via Health Kit and Google Fit?

Could smartphones soon be diagnosing diseases?

Health Kit and Google Fit have been described as "the beginning of a health revolution"
Ryanair has turned on the 'charm offensive' but can we learn to love the cut-price carrier again?

Can we learn to love Ryanair again?

Four recent travellers give their verdicts on the carrier's improved customer service
Billionaire founder of Spanx launches range of jeans that offers

Spanx launches range of jeans

The jeans come in two styles, multiple cuts and three washes and will go on sale in the UK in October
10 best over-ear headphones

Aural pleasure: 10 best over-ear headphones

Listen to your favourite tracks with this selection, offering everything from lambskin earmuffs to stainless steel
Commonwealth Games 2014: David Millar ready to serve up gold for his beloved Scotland in the end

Commonwealth Games

David Millar ready to serve up gold for his beloved Scotland in the end
UCI Mountain Bike World Cup 2014: Downhill all the way to the top for the Atherton siblings

UCI Mountain Bike World Cup

Downhill all the way to the top for the Atherton siblings
Save the tiger: The animals bred for bones on China’s tiger farms

The animals bred for bones on China’s tiger farms

The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK

A former custard factory, a Midlands bog and a Leeds cemetery

Introducing the top 50 hidden spots in Britain
Ebola epidemic: Plagued by fear

Ebola epidemic: Plagued by fear

How a disease that has claimed fewer than 2,000 victims in its history has earned a place in the darkest corner of the public's imagination
Chris Pratt: From 'Parks and Recreation' to 'Guardians of the Galaxy'

From 'Parks and Recreation' to 'Guardians of the Galaxy'

He was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star