CAA launches legal investigation into lowcostholidays.com
The CAA has launched a legal investigation into lowcostholidays.com and advises holidaymakers that their bookings may not be financially protected.
The advice follows Lowcostholidays’ move to Majorca on November 1, 2013, see (previous story) which means bookings now made on its website are not protected by ATOL – the UK’s holiday financial protection scheme.
The company claims bookings are voluntarily protected under the Spanish financial protection system, but the CAA’s legal view is that even if the bookings are accepted under the Spanish system, the value of the protection offered is extremely limited.
Andrew Haines, chief executive of the CAA, said: "If you book a holiday on lowcostholidays.com, you won’t receive ATOL protection. In fact, our legal view is that you may not have any protection at all and even if you do, the protection the site claims to offer is extremely limited.
"So consumers looking to book with the company have to ask themselves whether they are happy to take that risk or not. We are now using our legal powers to protect consumers and make sure they are not misled."
Alongside the legal investigation, the CAA is publishing the following advice for anyone who has booked on lowcostholidays.com, or is considering doing so in future:
- Bookings made on lowcostholidays.com since 01 November 2013 are not protected by ATOL.
- The CAA has taken steps to understand the Spanish financial protection system, where Lowcostholidays say their bookings are protected. The CAA’s legal view is that anyone booking on lowcostholidays.com may not have financial protection and even if they do, that protection will be extremely limited.
- Even if passengers are protected (which would most likely be for a Spanish court to finally determine) the protection under the Spanish system is not the same as ATOL. For example, unlike the ATOL scheme, passengers protected under the Spanish system are not repatriated home in the event of travel company failure whilst abroad.
Lowcostholidays.com said it has abided fully with legislation from 2012 which states that companies established in an EEA state other than the UK which sell air packages are exempt from the ATOL scheme.
"What we have done is completely legal and all our customers are fully protected under the European Package Directive with the full support of the Balearic Government," said CEO Paul Evans.
"We have the maximum bonding available under Spanish law and comply fully with EEC legislation and we believe and support all the moves towards European harmonisation."
Diane
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