12 December 2008

CAA to take action against illegal selling by agents over XL Leisure failure

The CAA is to take action against agents who unlawfully sold flights of former XL Leisure companies packaged with accommodation and other travel services.

It issued a statement today with regards to failed XL Leisure companies Freedom Flights and Pure Flights, which both held ATOLs and sold flights through their agents to the public.

But the CAA said, in a large number of cases, compensation claims have come from customers who purchased accommodation, or other travel related services, from an agent, at the same time as buying a flight.

It said these Ã¢â¬ÅâœcombinationÃ¢â¬~ sales were illegal because the transactions amounted to sales of packages.

Ã¢â¬ÅâœIn the view of the Trustees and the CAA, under the ATOL Regulations, the agents who made these sales and who received payment from the customer for the package should have contracted the whole package under one contract between the customer and an ATOL holder,Ã¢â¬~ said the statement.

The CAA said in order to protect customers from the delay and potential costs involved in claiming from the agent directly, it will issue refunds for flights booked.

But it will be taking action to recover monies for the ATT from the organising agents who made these unlawful sales.

Today, the CAA made a separate announcement that it was starting legal proceedings against Travel Republic for breaches of ATOL regulations (see separate story).

Freedom Flights ceased trading on September 12 and Pure Flights Limited ceased trading on 29 August 2008.

By Bev Fearis