Department for Transport announces protection for refund credit notes

20th July 2020 by Vincent Gumera

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Many tour operators have been offering refund credit notes for cancelled holidays instead of a full refund. Doubts existed as to the value of these credits if the tour operator became insolvent. Would the RCN be honoured by the ATOL system?

Now the DfT has announced that package holidays including a flight, where passengers have accepted an RCN will be protected by the ATOL scheme if necessary, even if the company they have booked with later collapses.

The philosophy behind this move is that by providing confidence to holidaymakers that their RCNs are protected if they choose them over refunds will mean they are supporting the travel sector’s recovery from the pandemic.

Holidaymakers will still have the right to a full refund if an RCN does not suit them. Note that the ATOL scheme only applies to holidays with a flight included and it is not clear from the press release that the protection extends to package holidays without a flight such as coach or rail holidays or to ‘no fly’ cruises.

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