THE collapse of Oxford-based SFV Holidays has dramatically highlighted the problems surrounding the policing of the EC Directive on package travel, which came into force this year.

French self-catering specialist SFV Holidays, which has been in business since 1982, went into voluntary liquidation on Tuesday. As the company was unbonded - it claimed that as an accommodation agent a bond was unnecessary under the directive - up to 800 families may lose their holidays.

Several companies are having talks with the receivers to take over the assets of SFV Holidays, which would mean that the holidays would be safeguarded. Those who paid for their holidays with a credit card - probably more than 75 per cent of clients - can recover their money from the credit card companies under the Consumer Credit Act.

Self-catering specialist Drive France is offering SFV customers a 20 per cent discount on self-drive holidays to comparable properties. 'We are keen to help. A collapse like this gives the whole specialist French tour operating industry a bad name,' said Simon Tobin of Drive France.

Readers of these pages will recall that last year there was an extended correspondence on SFV Holidays: the company had angered readers by retrospectively exacting a currency surcharge by deducting money from the returnable breakage deposit.

Undoubtedly SFV was badly hit by the heavy drop in the value of the pound against the franc last September, which meant it had to pay suppliers of accommodation in France more money. It will have been further hit by the slump in bookings to France so far this year.

Mike Bruce-Mitford of VFB Holidays said that the collapse of SFV should cause the Government to undertake an urgent re-examination of the implementation of the EC Directive. 'How can the purchaser be sure that the travel company he is buying a holiday from is properly bonded? A company may say that it is had made arrangements - but unless it is a member of one of the bonded trade bodies, such as Abta or AITO, or has an Atol - how is the traveller to know?'

Carol Bowhill, director of self-catering specialist Bowhills, believes that there may be many more companies like SFV Holidays trading without offering financial protection.

'I rang seven comanies which were advertising properties to rent in France in a package with ferry travel. Five have no form of financial protection: no bonding, no insurance, nor are they operating a clients' trust account.'

A second collapse last week of the Surrey-based Holidaymaker Group further highlights the disparities over consumer protection in the travel business. The Holidaymaker Group, which traded as Airtour Swiss and Airtour France (but had no connection with Airtours plc nor its airline, Airtour International), operated mainly as an agent selling tickets for airlines.

Passengers of Holidaymaker Group booked on flights with British Midland, Swissair, Lauda Air or Alitalia not in possession of tickets will not be able to travel, but will be able to claim a full refund from the CAA's air travel organisers' licence section. Passengers booked on other airlines with which Holidaymaker did not have a special arrangement will have to contact the airline.

'If they have a ticket they may be OK. If they don't have a ticket, they may have a problem,' the CAA said. Flight-only arrangements are not covered by the EC Directive, which covers only package travel.