Picking up the pieces of your holiday after your travel firm goes bust

The news broke earlier this week that long-established travel company Thomas Cook collapsed, affecting 155,000 left abroad.

After reporting losses of £1.5bn in May, the company, which has been operating for 178 years has been put down to competition, has put their descent down to factors including high competition, weather issues and global political unrest.

So what happens if the holiday firm you’ve booked with goes bust? And how do you go about getting a refund or compensation?

Make sure it’s Atol protected when booking

The Air Travel Organiser’s Licence scheme (Atol) exists to reassure those who booking a holiday package that comes with an Atol certificate will be reimbursed if their travel company goes bust.

Most Thomas Cook holidays are packages and the Civil Aviation Authority (CAA) which runs the Atol scheme plans to launch a service to manage refunds for Thomas Cook travelers by Monday 30th September. They have asked those affected not to submit any forms before then.

Not all travel companies will sell Atol protected holidays, so weigh up the cost savings of that cheaper holiday against the possibility of losing out altogether if the company does go bust.

If you’re already on holiday

Most travel agents will pay for flights when you first book, so getting flights home wouldn’t present a problem.

However this is not the case with accommodation, and you may be asked to pay for your stay or to leave immediately. You would also need to pay for your transfer back to the airport.

Keep receipts for anything you’ve had to pay for in case you can claim it back. If your holiday is Atol protected, extra accommodation costs can be reimbursed by the CAA.

Thomas Cook customers may have a wait of up to two weeks as the government runs a shadow airline to ensure they all get home.

If you have an upcoming trip

If you have a receipt for your flight you will be able to travel as normal. If you don’t, then you will need to check directly with the airline who will be able to confirm whether or not you have a ticket.

You would need to book your own accommodation and travel arrangements at your destination. If you’ve only booked your accommodation and you still wanted the booking, then you would need to re-book and pay again.

Claiming your money back

Even if your tour operator isn’t Atol protected, that doesn’t mean you can’t get a refund. It all depends on how you paid. If you used your credit card to pay for all or part of the booking, you may be able to claim this back according to section 75 of the Consumer Credit Act.

This does not apply if you paid by debit card, although some banks offer a chargeback scheme.

Paypal also have a buyer protection scheme, for which you would need to contact them within 180 days.

Certain travel insurance policies will offer End Supplier Failure Cover which will compensate you in the event of your travel agent folding. Speak to Sureplan for more information.