July 20 - Holidaymakers who were given refund credit notes, rather than cash, for their cancelled package holiday are being reassured their money is safe.

The authorities have clarified that these refund promises are guaranteed even if the travel company which provided them goes bust.

They are distinct from holiday vouchers which do not have the same protection.

Anyone whose package holiday is cancelled has the right to a full cash refund.

 

How refunds work

Refund credit notes (RCNs) were handed out by some holiday companies instead of refunds early in the coronavirus crisis, as the businesses found themselves stretched by the level of claims.

They can be used to book another holiday, or a refund is given when the note expires.

Anyone whose package holiday is cancelled by the provider is entitled to a refund of the whole holiday, by law, within 14 days.

However, after some of these RCNs were accepted by customers, the Department for Transport and the Civil Aviation Authority (CAA) have now confirmed that RCNs are protected under the Atol scheme, which is government-guaranteed and administered by the CAA.

It will apply to all relevant vouchers issued by Atol holders operating within the UK.

This means that the refund will be honoured, and can be drawn from a central pot, even if the provider goes bust.

 

What are my rights?

• If you have a package holiday cancelled by the provider, then a refund should be provided for the whole holiday within 14 days • If your flight is cancelled, you are entitled to a full refund to the original form of payment within seven days, although many airlines are struggling to meet that deadline. You can accept, or refuse, vouchers or a rebooking but a voucher will probably be invalid if the airline later goes bust • If you decide against going on a future flight, which is not yet cancelled, then there is no right to a refund. Different airlines have different rules over what you can do, but many are waiving any charges for changing to a later flight or having a voucher instead. Your travel insurance is unlikely to cover you

 

“This is not only good news for anyone looking to get away for a break in the sun, but also for the aviation and travel sector which has been hit hard by the pandemic,” said Transport Secretary Grant Shapps.

He told BBC Breakfast: “It’s providing more flexibility, with the government standing behind the consumer and also the travel companies.”

The announcement covers refund credit notes issued between 10 March and 30 September for package holidays cancelled owing to Covid-19.

 

 

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