Card customers protected against bankrupt Goldtrail
By UK CreditCards.com
The British travel industry was plunged into chaos again recently with the collapse of travel firm Goldtrail. However, anyone who booked an upcoming trip with the company on a credit card should be able to claim a refund.
Goldtrail goes under
Goldtrail's collapse was confirmed after the company told the Civil Aviation Authority (CAA) that it was insolvent and had called in administrators from Begbies Traynor. The news forced 50,000 holidaymakers to rearrange their travel plans for this summer, while some 15,000 Britons were left stranded in countries such as Greece and Turkey. Although about 9,000 of these have since returned home, many will be wondering if they are entitled to compensation.
The Atol Travel Trust scheme
Three years ago, a government-backed consumer protection scheme was introduced, which involved a £1 levy on package holidays to cover repatriations and refunds in the event of tour operators going under. However, the Atol Travel Trust initiative is already £32m in the red and the levy was raised to £2.50 last October after the collapse of XL Leisure. The majority of Goldtrail's customers are covered by the bond, which will help them to get home and avoid forking out for additional costs. However, the situation has highlighted the complications with the scheme, which the Labour government was reviewing before losing the recent general election.
The CAA suggested that the XL Leisure situation, which saw some customers waiting for more than 12 months for a refund, will not be repeated on this occasion. However, some Britons who booked holidays for later this summer with Goldtrail are concerned about the implications of its collapse on their finances.
Section 75 and Chargeback
Jamie Phillips booked a Goldtrail trip with his girlfriend July 16, which was the day that the company informed the CAA of its situation. "We found on Saturday they'd gone bust," he said in an interview with the Yorkshire Evening Post. "We have got £450 worth of Turkish lira, we bought new clothes and suitcases ready to go. If it was on a credit card we'd have got the money straight away but now we have got to wait up to 12 months for Atol to refund us and now we are absolutely skint."
Mr Phillips' comments underline the importance of booking holidays on a credit card. Section 75 of the Consumer Credit Act entitles individuals to a refund from their providers on purchases between £100 and £30,000 if they are unhappy with the goods they have received. In addition, anyone who used a Visa debit card is covered by the company's chargeback scheme, which offers similar protection to Section 75.
"Sometimes card issuers misunderstand the Section 75 and Chargeback rules and refuse a claim," advised financial journalist Lisa Bachelor in an article for the Guardian. "Anyone in this situation should make sure they know their rights and argue their case. If all else fails, contact the Financial Ombudsman."
Published: 26 July 2010
- Industry responds to FCA's proposal on persistent credit card debt – Here's what industry experts have to say about the FCA's proposal to help credit card consumers in "consistent debt" ...
- Open banking FAQs answered – What is the new "open banking" initiative, how will it work and how will it benefit you? ...
- FAQs on FCA proposal for helping consumers with persistent credit card debt – The FCA is suggesting new rules for credit card companies to help those with "persistent debt". Here's what you need to know ...