reported on the Government's plans to introduce the bulk of the ATOL reforms at the end of April 2012." />

Teething problems as the ATOL reforms bed in

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Yet before the reforms have even gone live, the Government has agreed it will allow May to be a transition period. The introduction of the "flight-plus" category of holidays into the ATOL protection scheme means that an increased number of agents will need to hold an ATOL licence. Due to the speed with which the Government has introduced the changes, not all businesses who need an ATOL have been able to apply for one in time. This could mean that consumers booking a "flight-plus" holiday are left without financial protection if the holiday supplier goes bust.

Under the transition provisions, during May the Air Travel Trust has agreed to honour claims if the business selling the "flight-plus" holiday goes bust provided it was making substantial progress towards obtaining the ATOL.

This has the potential to put significant pressure on the pot of money set aside to secure refunds for consumers under the ATOL scheme. Traditionally, holiday companies tend to go bust towards the end of the peak holiday season but this has not been the case in recent years where cash flow has caused travel companies to default much earlier in the year.

Let's hope that reforms introduced to increase consumer protection have the desired effect and are not thwarted by attempts to introduce change too quickly.

Read more here.

Chris Deacon
Solicitor - Claims Abroad team

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