Thomas Cook, Britain's oldest travel firm, collapsed on Monday stranding 150,000 travellers abroad and leaving millions more with future holidays hanging in the balance. Here's what you need to know if you've been affected.
Firstly, any Thomas Cook customers who were on holiday with the firm when it collapsed will be brought home. Package holidays booked with Thomas Cook are covered by Atol (Air Travel Organiser's Licence) protection. Atol is a state-run financial protection scheme operated by the Civil Aviation Authority (CAA) and funded by a levy paid by all Atol holders.
The fund is then used to refund, repatriate or reimburse travellers when a tour agency goes bust. So the CAA will pay for your hotel if you are abroad and arrange flights to bring you home. The CAA has set up a dedicated website to deal with Thomas Cook customers. It gives you information about flights home and claiming your money back (thomascook.caa.co.uk). You can also call them on +44 (0) 333 103 6350.
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Some holidaymakers are being asked by their hotels to pay for their room. The problem is that travel firms typically pay hotels for your room 60 to 90 days after your holiday. But it is not your responsibility to pay the bill if your holiday firm ceases trading it's the CAA's. So, if you are asked to pay, contact the CAA. If you have already paid your hotel some or all of the bill, you should be able to get a refund from the CAA. Most Thomas Cook customers currently abroad will be flown home on flights specially chartered by the CAA. It is expected to be the largest repatriation of British citizens since the Second World War. However, if you are holidaying near an airport served by other UK airlines you may be asked to make your own arrangements to travel home, in which case you will bereimbursed.
"Be prepared for possible delays and the risk that you may be flown back to a different UK airport to the one you took off from, then bussed to your initial departure point," says Patrick Collinson in The Guardian. It is likely to take up to two weeks to get everyone home, with people being brought back as close to their original return date as possible.
What Atol does and doesn't cover
If you've booked a holiday with Thomas Cook and were meant to be setting off in the next week or so, you can claim a refund for your trip on the CAA's Thomas Cook website. In time a "fulfilment partner" will be appointed to provide holidays that were booked with Thomas Cook, but this will take some time to set up so it will only cover trips booked further in advance.
Although Thomas Cook customers who only booked a flight or accommodation through the firm won't be covered by Atol and will be unable to claim a refund, if you paid with a credit card and spent more than £100, you can claim a refund from your credit-card provider under Section 75 of the Consumer Credit Act. You may be able to claim debit card payments back through the chargeback scheme "but this is not enshrined in law", says Paton. Finally, you should check your travel insurance policy to see if you are covered for "scheduled airline failure".
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Ruth Jackson-Kirby is a freelance personal finance journalist with 17 years’ experience, writing about everything from savings accounts and credit cards to pensions, property and pet insurance.
Ruth started her career at MoneyWeek after graduating with an MA from the University of St Andrews, and she continues to contribute regular articles to our personal finance section. After leaving MoneyWeek she went on to become deputy editor of Moneywise before becoming a freelance journalist.
Ruth writes regularly for national publications including The Sunday Times, The Times, The Mail on Sunday and Good Housekeeping, among many other titles both online and offline.
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