ABTA’s recent decision to change its “constitution” so as to ensure “supplier members” protect consumers where other failed ABTA agents have received consumer funds but not paid them over to the supplier, seems to have only one inevitable conclusion. Unless ABTA agents commit to solely buy from other ABTA members then this will lead to wholesale resignations by some current “supplier members”.
ABTA continue in their desperate attempt to protect their logo and the consumer’s perception that this provides total consumer protection. Once again ABTA is faced with the conundrum can they be both a trade association and a peoples’ champion? In my book they cannot do both. Why would I want to be a member of an association that finds ways for me to pay out monies due to the failure of another of their members when I am not contractually bound to?
Principal members who carry considerable agent risk are only covered to the extent of £100,000 of pipeline monies cover in any one membership year. By virtue of the fact that the major retailers and retail chains require bedbanks, transfer and car hire suppliers to extend credit until after the consumer travels, the exposure to these suppliers is huge. Surely this area should have been targeted by ABTA. ABTA cry “Don’t expect us to do your credit risk for you”, a reasonable statement if it was not for the power these large retailers exert over suppliers and the unfair advantage that the current ABTA structure gives them.
In my opinion the bedbanks etc are not the “big bad wolves” as they have so often been portrayed. They have adapted an unbelievably flexible and workable (ABTA would say risky) model that enables ABTA’s retail members, despite selling travel combinations – very few now sell single component only travel arrangements – to abdicate responsibility for the consumer from both a protection and a liability viewpoint, not pay TOMS VAT and until now not have the fiscal and other constraints of an ATOL licence.
In view of the CAA’s imminent “flight plus” consultation and implementation would it not have made more sense for ABTA to look at the companies who actually interface with the consumer providing a more effective protection or payment terms with suppliers structure as they assuredly will have to under “flight plus”?
While the ABTA changes are at first glance an admirable attempt to further protect the consumer they will do no such thing. Ultimately the CAA will do this, with the backing of government, by changes to the ATOL regulations. ABTA members will continue to buy on price and will not give a damn if the supplier is an ABTA member or not. Why would they worry if their own failure precipitated a consumer protection gap. They haven’t in the past and they wont in the future simple as that. All the change means is that certain ABTA members have been unfairly singled out.