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Published on Wednesday, May 13, 2020

Government has NOT confirmed credit notes are financially protected

Trading Standards threw the travel industry into a further state of confusion this week when it incorrectly claimed in a business publication that Refund Credit Notes have financial protection.

It wrote in Business Companion, a guide for companies, that when refunding cancelled holidays, a credit note 'is another increasingly popular alternative and will be financially protected in the event of future failed travel plans'.

As the publication produced by the Chartered Trading Standards Institute is backed by the Government's Department for Business, Energy and Industrial Strategy (BEIS), some in the industry took the news as the official confirmation ABTA has been seeking for months.

ABTA issued a statement which said: "That the government recognises and is now communicating that credit notes are financially protected and may be offered will give customers confidence that their money is safe. If this had been confirmed earlier by government it would have helped avoid a lot of concern and confusion among customers."

However, when TravelMole contacted BEIS directly to request confirmation, it made it clear the Government's position on refunds had not changed. Trading Standards later issued a correction in Business Companion.

It said that it was incorrect to say that credit notes were financially protected, adding only that they 'may' be protected.

"For the removal of doubt the government position regarding credit refunds is unaltered," it added.

The news will cause even more frustration for travel agents, who have been waiting for weeks for the Government to confirm whether the Air Travel Trust Fund will cover Refund Credit Notes if a tour operator fails. 

AITO executive director Martyn Sumners said: "It's pretty unbelievable and stretches credibility that Trading Standards, as the Government's law enforcement office, could have made a mistake like this. It's equally difficult to believe that BEIS wouldn't have had sight of this document before it was produced.

He said AITO staff have been verbally abused by consumers and memebrs 'left hanging out to dry' by the Government's inaction.

"AITO hopes that BEIS will remember, going forward, its own words of wisdom about communication and trust having important roles to play."

Despite the correction being issued, ABTA insisted credit refunds are still protected. A spokesman said: "The ATOL scheme payment policy states that deferred bookings for ATOL protected holidays - in order words, credit refunds - are financially protected. The package travel regulation rules do not need to be changed for this to be the case. ABTA absolutely endorses the need for these refund credits to be documented and processed properly. That is why we've provided clear guidance to our members on this."



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