Agents face new ATOL crackdown

Travel agents found to be flouting new passenger protection rules face £5,000 fines and two years in prison as part of a crackdown by the Civil Aviation Authority.

The CAA today issues new ATOL protection guidelines to close a loophole in regulations regarding agents selling tailor made or dynamically packaged holidays. The new rules are expected to come into force by early summer.

The authority says as a result some travel firms will need to apply for licences for the first time and some existing ATOL holders will have to increase the size of their bonded licence authorisations.

Meanwhile, the CAA is working in tandem to create a system of consumer protection against scheduled airline failure. Detailed proposals are due to be presented to the government by the end of the month following consultation between the CAA and the Department for Transport on the issue.

The CAA is to carry out increased monitoring of agents to ensure they are complying with the revised ATOL regulations.

The authority said: “Firms should be aware that it is the CAA’s policy to prosecute in cases where firms have been made aware of the compliance requirement but have failed to obtain an licence. The maximum penalty on summary conviction is £5,000 and on conviction on indictment to a fine or imprisonment for a term not exceeding two years or both.”

Guidance notes issued by the CAA state: “Travel firms which sell air package arrangements which they have constructed themselves will, in the majority of cases, need to hold an ATOL to protect these sales.”

But the authority’s consumer protection group deputy director David Moesli told TravelMole that agents using ATOL-holding online dynamic packaging companies such as lowcostbeds and Thomas Cook’s flexibletrips to create holidays for clients would escape the need to have their own ATOL. 

The CAA is to run four ‘ATOL Open days’ for agents to explain the new licensing criteria and trading options open to them. These are to be held in London on April 15, Birmingham on April 19, Manchester on May 11 and Newcastle on May 20 (to be confirmed).

Mr Moesli explained that agents had a number of options open to them.

He said: “They can offer air packages as retail agents of ATOL holders, including the new and growing number of dynamic packaging systems marketed to agents by ATOL holders. This option has the added reassurance that an ATOL holder takes overall responsibility for the complete package and its performance.

“Others may decide to get their own ATOL and put together their own packages using different suppliers, and take overall responsibility for these sales.

“Some may decide to just continue retailing packages for tour operators in the traditional manner.”

The aim of the new regulations is to ensure financial protection to holiday arrangements which are constructed by agents using different travel components, such as transport, accommodation and other tourist services as defined European Package Travel Regulations.

Mr Moesli said: “The issue of what is an air package has become increasingly unclear and we are now putting this straight by giving straightforward and understandable advice.”

He said a change in the law two years ago brought within ATOL protection many split-package sales where the public could potentially miss out on the financial cover they expect when buying an air holiday.

“However, with rapid changes in travel sales methods it became clear that more detailed guidance was needed for travel agents and this is published today following discussions with the Department of Trade and Industry,” added Mr Moesli.

Report by Phil Davies 

Related News Stories: