A U-turn by ATOL means thousands of holidaymakers caught up in the collapse of XL Leisure are facing yet further delays in their compensations claims.
Package holidays booked with the failed leisure giant were covered by the Civil Aviation Authority‘s ATOL bonding scheme, meaning victims could claim their money back. However ATOL is now using a legal loophole to shift the onus on to credit card companies for customers who paid fully or partly with plastic.According to The Times newspaper, the CAA told victims in a letter: “Pursuant to Section 75 of the Consumer Credit Act 1974, credit-card issuers are also responsible… Therefore, you should forward your claim to your credit-card issuer for reimbursement.”
Carole Adams, from Norwich, who lost a £4,680 holiday in Florida, told The Times: “I paid half on my credit card and the rest on the debit card, and we were told we would get full compensation from ATOL. We’ve been waiting four months for reimbursement - paying interest on the card debt the whole time - and now they tell us we have to submit a new claim, and face another delay, before the card company pays up. It doesn’t make me very confident about booking another holiday, especially in the current climate.”
The CAA claims about 4,000 of the 45,000 claims it has received to date have been rejected. It says it advised passengers at the time of the collapse to go straight to their credit-card companies if they had paid in full with plastic. However, it also accepts that this advice was not given to those, such as Carole Adams above, who had paid for only part of their holiday on their credit cards.
Asked why claimants had been made to wait over three months to be told their claim had been rejected, the CAA said delays had been incurred while it sought advice over passing on the claims to credit-card companies.
XL Leisure and subsidiary companies, including Travel City Direct, Freedom Flights and Kosmar Villa Holidays, went bust on September 12, leaving 85,000 holidaymakers stranded overseas and an estimated 200,000 with advance bookings.