ABTA Chief Executive Mark Tanzer has clarified proposals being put to ABTA Members to vote upon at a specially convened General Meeting on Friday 2 October:
“Last week we announced that the ABTA Board was proposing changes to clarify the responsibility of ABTA Members for protecting customer monies.
“The proposal is that any ABTA member supplier, whether acting as principal or agent, who sells to a customer through a travel agent should be responsible for that customer’s money in the event that the travel agent fails before payment has been passed on to the supplier.
“The Board considers this to be an important matter of principle, which will help reinforce consumer protection and confidence in buying from ABTA members.
“The proposal addresses a new phenomenon seen in the market where travel agents have failed holding significant amounts of customer money, and the supplier whose product they were selling consequently refuses to fulfil the customer’s booking.
“We believe that the change should also head off the risk of increased credit card security demands or charges from merchant providers who believe that they are facing additional exposure as a result of the refusal of suppliers to fulfil bookings.
“ABTA suppliers who are selling through ABTA travel agents will continue to benefit from the pipeline money protection in the event of agent failure – ie an amount equal to three times the member’s relevant ABTA subscription, or £100K, whichever is the greater.
“If a member’s exposure to a travel agent’s failure exceeds this amount of cover, they may consider supplementing ABTA’s protection with credit insurance, or changes to their general terms of trade. The ABTA Board recognises this as a necessary cost if the confidence in dealing with ABTA Members is to be maintained, and the credit risk fairly apportioned.
“This change to the Articles will only apply to ABTA Members but, in so far as it follows broader consumer protection and contract law, we believe the same obligations exist for non-ABTA suppliers. Where we see these obligations being flouted by non-ABTA suppliers, we will approach the relevant authorities charged with protecting consumer rights, so that they can take action as they see fit.
“The change being recommended by the ABTA Board will be put to a vote at a General Meeting on 2 October 2009. You should have received notice of the Meeting. Further copies, and voting forms, are available in the Members area of www.abta.com.
“These are difficult times for the industry and this proposal is part of a wider range of industry reforms being championed by ABTA including a proposing of fundamental reform of the ATOL scheme which will bring all flight and accommodation holidays within a single scheme of financial protection, to the benefit of the industry and customers alike.
“I hope that these proposals will get the support of the ABTA membership. I believe that they reinforce ABTA’s commitment to consumer protection, and to clarity for the trade.”