Court case karma…….or is it? – TravelMole guest comment by Bruce Treloar

Bruce Treloar is principal trading standards officer for West Sussex County Council

The Court of Appeal last week dynamically levelled the playing-field for the sales of online and high street package holidays.

There has been a long held view in Trading Standards that there are online sales of package holidays which unfairly compete with properly bonded operators, e.g. online flight seat sales where links are made to online accommodation purchases. In addition, recent evidence would suggest these sales of individual components are becoming more popular than the sales of traditional brochure package holidays from high street retailers.

This recent court judgement (CAA v ABTA, 17/10/2006) has however taken a giant step forward in clarifying the law relating to online and high street sales, but to the clear detriment of the consumer.

We are not surprised the court came to its decision. Scheduled and no-frills airlines have been selling flights without any form of bonding for years and online sales of package holidays weren’t envisaged when the law was made 14 years ago. The judgement sees the demise of the system of regulated protection for consumers when buying their summer holiday.

To try and make sense of their judgement, the court decided to give a couple of examples of a consumer going to his travel agent to buy a weekend break in Rome. The two scenarios envisaged are;

1.       The consumer is told the flight is £100, the hotel £150 and car-hire £70. The consumer can pick and choose what parts they want and if the consumer agrees to buy all three at an inclusive, ‘package’, price of £320, the transaction is not a package, there is no protection for his money and agent won’t be responsible for a poor hotel or if the car-hire firm collapses.

2.       However, if the consumer is told the flight, hotel and car-hire is at inclusive, ‘package’ price of £320, the law applies, the consumer’s money is protected and the agent has responsibility for all the component parts!

How on earth is this supposed to bring transparency for consumers?

Admittedly they have become savvy in the ways of buying their holidays. The DIY option (or dynamically packaged options, in industry speak) is becoming more popular despite the greater risk for consumers losing their money or being stranded abroad. So we weren’t surprised and don’t blame ABTA for challenging the CAA over their insistence that travel agents have to possess an ATOL when selling flight inclusive packages.

The law is confusing and, in our view, outdated. Just the very point ABTA and the Appeal Court made.

So where does this leave consumers and ourselves? As enforcers we now tend to think we are intelligent enough to interpret the rules, but stupid enough to think we can make any difference!

We say there needs to be a radical overhaul of the whole protection system to meet the reality of buying holidays these days.

And spare a thought for consumers. Visits to travel agents will be like going online:

1.       When paying for a brochure package holiday, (by Switch, cheque or cash),their money is immediately on risk until they receive a confirmation invoice from the tour operator

2.       If the agent sells the component parts of a package holiday, did they price the separate bits or as a whole? Did the consumer remember, do they really care?

3.       Finally, the judgement will enable tour operators to restructure their business, so in the future package holidays will never be the same. TUI was reported last week saying, although the difference would be explained to the consumer, no longer would they be responsible for the resort hotel or hire-car businesses………..seems to be the end of due diligence as we know it!

We disagree with ABTA that the judgement has aided consumer transparency, but we do agree there needs to be a universal system of rescuing consumers stranded abroad and a credible alternative to the bewildering array of protection schemes!

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