Travellers who settle for refund credit notes for cancelled bundle holidays will get their money back if their journey is cancelled or the travel firm later collapses, the Government has introduced.

The Civil Aviation Authority (CAA) stated the Department for Transport had supplied “much-needed clarity” by confirming that such circumstances can be coated by the Atol scheme.

Package vacation prospects whose journeys have been cancelled due to the coronavirus pandemic are entitled to a money refund.

However, many travel firms are providing refund credit notes to assist their money stream.

These permit prospects to re-book their vacation or request their money back at a later date.

But there have been doubts as to whether or not they’re protected by Atol.

The scheme is generally used to cease bundle vacation prospects being stranded overseas or dropping money from future bookings when operators collapse, as occurred with Thomas Cook in September 2019.

Consumer group Which? has been advising folks to reject refund credit notes and “insist on a refund” due to considerations about them being nugatory if the issuing firm goes bust.

Transport Secretary Grant Shapps stated the transfer despatched a “clear message” that folks may guide their holidays with confidence.

Credit Refund Notes can be Atol protected (Getty Images)

He informed BBC Breakfast on Saturday that it will additionally forestall travel firms from collapsing, as a result of they might supply holidaymakers credit notes as a substitute of getting to pay a refund.

Mr Shapps added: “Up to now anybody who had a bundle vacation, a holidaymaker, would have been asking probably for a simple refund, perhaps as a result of they had been conscious that if the vacation firm itself went down then a credit observe wouldn’t be honoured.

“What I’ve achieved in the present day is alleged really we’d like to be certain that we’re going to stand behind Atol in order that, should you do have possession of a credit observe, that may nonetheless be honoured, backed by Government, even when that travel firm goes down.

“That’s going to both reassure, I hope, consumers, holidaymakers, but also prevent, I hope, the travel companies, who have had a pretty tough time, let’s face it, from going down, because they are not going to have to automatically provide a refund unless that’s what the person wants.”

The announcement covers refund credit notes issued between March 10 and September 30 for bundle holidays cancelled due to Covid-19.

Consumers stay entitled to a money refund inside 14 days, though 1000’s have been compelled to wait longer to get their money back.

Grant Shapps stated: “This is a constructive step in the direction of restoring belief within the travel business” (10 Downing Street/AFP by way of Getty)

CAA shopper director Paul Smith stated: “This news provides much-needed clarity for consumers, who should now feel confident that their money is secure if they have chosen to accept a refund credit note for their cancelled Atol-protected booking.”

Travel commerce organisation Abta stated the announcement “gives reassurance to consumers and supports the travel industry at an especially difficult time”.

Which? Travel editor Rory Boland stated the clarification can be “a huge relief” to prospects who’ve accepted refund credit notes.

He added: “This is a positive step towards restoring trust in the travel industry.”

Some travel corporations are providing vouchers relatively than refund credit notes.

Although these are sometimes price greater than the unique reserving, to incentivise prospects not to request money, the CAA stated they aren’t Atol protected.

The Government is the monetary backer for the Atol scheme, which is run by the CAA.

Travel corporations are required to contribute £2.50 for each bundle vacation buyer. The money goes in the direction of a fund which is used to repatriate or refund travellers in circumstances of insolvency.

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