Lowcostholidays.com – Where low cost means high cost

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When http://www.lowcostholidays.com/ moved away from the UK’s ATOL protection scheme a few years ago, people in the industry did raise their eyebrows. Lowcost moved to the jurisdiction and “protection” of the Spanish authorities, no doubt in a move to save costs.

You can debate all day long about whether holidays should carry mandatory financial protection. However where there should be no debate, is on the fact that customers need to be made aware whether their holidays are covered by a suitable financial protection scheme or not. If you want to get a holiday cheaper because it’s not protected then it’s your choice…. as long as you were made aware of it from the start.

This is where Lowcostholidays got it wrong.

When we “got wind” of Lowcost’s likely demise a few hours before it was made public, we decided to take a look at the financial protection part of their website. It’s not online now but it was when they were trading and it said:-

“You can have confidence when travelling with lowcostholidays. We have been successfully trading for 10 years and we have full financial protection arrangements as required by European law.

We are established in Spain. Spain, just as the UK does, has financial protection requirements for travel companies. We comply fully with those financial protection requirements. We are licensed with registration no. AVBAL636 and as part of the provision of financial protection arrangements, we have provided a Surety Insurance.”

To the independent observer this surely gives the impression that while not covered by the UK’s protection scheme, you are covered by a scheme that is as good. Using phrases like “Spain, just as the UK does, has financial protection requirements….”

While their statement may be strictly true to the letter, it was no doubt designed to give the impression that the Spanish protection is as good as the UK one …. but it isn’t. The UK’s ATOL scheme should provide a full refund on holidays included in the bonding scheme. It looks like customers of Lowcost might only get 7p back for every £1 they spent. 7% protection is a long way off 100% protection.

If you booked on a credit card then you might be able to get your money back off your card company. However if you now have to rebook your holiday and pay for it again, you might have to find the money before the card company refunds you. You may also have to pay more for your holiday as the hotel or airline might charge you more than the original price.

So until financial protection becomes completely mandatory for UK and non UK travel companies selling to UK customers, you need to look out for that ATOL protection with every holiday you book.

Because in the words of a Mafia stooge visiting your business, there is protection and then there is PROTECTION…

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