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What to do about a competitor trading without protection ?

I just posted in the discussion about ABTA and the TTA, and it got me thinking again about one of our competitors who I found out recently is trading without offering any financial protection to its clients.
One of their management told me at a travel show, quite calmly, that they just take their customers' money, put it in their trading account, and spend it as and when, without complying with the Package Travel Regulations or running any financial protection scheme.

It took me aback at the time how casual he was about it, and I asked him if he really wanted to be telling me this. I also suggested (politely but pointedly) that he should do something about it asap..

To my knowledge, nothing has happened though, and I'm not sure what to do next. I think the way they are operating is unacceptable as far as their customers are concerned, as well as unfair to their competitors.

However, I instinctively feel I should give them a chance (albeit it a short one) to correct things before reporting them to trading standards or elsewhere.
I'd appreciate any comments or thoughts people may have on how they would approach a similar situation.
Thanks, Ralph

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As a recent member of the TTA it riles me greatly (pisses me off!) that companies such as the one that Ralph describes can flaunt the rules, and break the law in this way. I suspect there may be a sizeable minority of companies out there that operate this way. I for one would have no hesitation in reporting travel companies that operate outside the law to trading standards. As Ralph says "the way they are operating is unacceptable as far as their customers are concerned, as well as unfair to their competitors."
I'm not sure how one would know which companies do operate without protection unless it's policed by the goverment, TTA and ABTA jointly.
Ralph - why don't you get TTA to approach them?
I've raised this with the TTA in the past and they advised me to get in touch with Trading Standards. The issue with this (to me) is that we'd all have to get in touch with various different Trading Standards offices (as far as I know) depending on where the company was based and that individuals in those offices may not be as up to speed with PTR and they probably have other things to deal with, e.g. Mrs Joe Public who got ripped off at her local electrical shop.

I think it would be a lot more powerful if the TTA gathered a list of names from its members and approached Trading Standards centrally so there was a concerted effort/clampdown. I've seen on Watchdog when this sort of thing has happened in other industries and Trading Standards have set up a central team and deal with it. I think it would be a great thing for a trade association to do.
Trading Standards are the people to tell. Advise ABTA that you are telling trading standards. It is important that this is reported as we are just lining up for another tabloid headline about someone or the other walking off with clients money. The whole reason why travel agents are bonded etc etc is two fold, firstly that they are dealing with the greatest item in most famillies annual expenditure - their holidays. Taking money from them without responsibility is taking money earnt by the sweat of the brow and that is unforgiveable. Secondly, travel is a (very) high turnover/ low margin business and the temptation of seeing large numbers in a bank account could often be too much for many. There is also the matter of "Hey! I have gone through all the hoops, so why the ruddy hell should you get away with it?"

Now, it should be said that it is technically possible to trade without due licence - IF no money is taken by the agent. All cheques are payable to and all credit cards taken by, the duly licensed operator, who on some future occasion, provides a cheque back to the selling "agent". BUT this is very, very unusual and of course, how do you handle any cash sales? The only way to show that the person is doing this, is by trying them out.- over some time. Techinically, this is possible but I doubt very much if it is practical or probabal in the longer term.

So No, they do not deserve a chance. The only chance that you are giving them of taking a lot of people's hard earned cash and doing a runner....
Thanks for the replies & suggestions. I'm writing to the company today to ask officially what protection they are providing, and to inform them that unless I receive an immediate satisfactory answer, I'll be reporting them to trading standards. I'll also contact ABTA and the TTA about them.

I'm also in contact with some of our friends in other companies from our overlanding days, trying to assist in getting another website taken down which has been set up by an ex-overland driver with a really dodgy past. Its frustrating how easy it can be online now to put a decent looking website up, and start scamming people.
You are all right in saying we need to be on our toes and crack down on them when they appear for both our industry's benefit and that of the general travelling public.
Just seen this discussion.
Yes we had a situation where a competitor was breaking the rules. We inquired about the situation since BERR rules state that any two of the following consitutes a tour. Accommodation longer than 24 hrs, entertainment,surface trips etc etc
These guys were overseas with a website that clearly stated "Phone here to book or find out more" etc and it was a UK phone number which transfered to their o/seas offices.
Local trading stsndards said " No they are and overseas company and there is nothing we can do" This angered us so much that we even considered forming a foreign company and doing the same thing.
I suggested to Trading Standards that they should seriously look at situations like this because it still involves the UK travelling public but to no avail. So my advice is cost up what it will cost to set up in the UK and compare that to a nice home in the sun with an o/seas company!!!
Hi Ralph

Thanks for taking this one up for the rest of us. I pretty sure a lot of my competitors don't have any financial protection in place either. I also face competition from hotels who offer packaged products which include golf, accommodation and transfers - I've seen a lot of these advertised in connection with this years Open Golf Championship.

I'm also a member of the FSB and I called their legal advice line and they said exactly the same thing - you should make a report to the local trading standards office nearest their place of business. They also advised you to do this without disclosing your identity just in case the people behind the business are dangerous individuals and pursue a vendetta against you when you try to close them down.

I think there are two strands to this particular problem:

1. We need to educate customers to say to them don't buy a product unless the operator is ABTA/TTA registered or has TOPP insurance.

2. To lobby the government to change the law to state that you need a licence to run a tour operator's business. The licence would only be granted on showing you have financial protection in place for customers money. I know this would add a further layer of regulation but it is certainly better than having people running businesses that leave customers out of pocket and damage the reputation of the industry as a whole.

I think the trade bodies such as the TTA could help us with both of these points. A letter to the Tourism Minister Barbara Follett might not go amiss to highlight this problem.

Good luck and all the best

whether based in the UK or abroad, if a company is selling flights departing from the EU or UK and selling them at an inclusive prices on the website as part of the holiday, it is breaching the CCA's ATOL regulations.

If you are aware of a possible breach of the ATOL regulations you can e-mail or telephone


Tel: 020 7453 6700

It states on the web page: "All enquires will be treated in confidence".

CAA website more details here and also -

For what reasons you should contact ATOL Enforcement

I do not work for the CCA or ATOL. This information is somewhat hidden on their web site and I wish the CAA would give some clearer guidance. Especially as there are more and more companies, setting up operating outside the UK law.
Just an update...
I am advised now that the company is offering protection, which is great.
If they have just started this following my prompting, then it was worth doing. If they were doing it already and I had my facts wrong, then fair enough (However what they say they are doing now, still doesn't match what they say in their booking conditions).
Anyway, I contacted their local Trading Standards office, so I know I have done the right thing from my end, and so I know how to do this in any future situations.
My experience with them I think is worth passing on.

1. You can't actually speak to anyone at the local council trading standards office. They put you through to Consumer Direct. (08454 04 05 06)

2. Consumer Direct give advice to the public about consumer issues and problems you may have with companies. They do not do any investigations themselves, but will record your complaint and pass it back to Trading Standards to investigate. As a result, they aren't really the people you want to talk to.

3. Be prepared to have to explain in detail to the staff at Consumer Direct:
- what 'financial protection' means,
- why a company needs to have it, and what the Package Travel Regulations are,
- what the different ways are they can offer it (i.e. trust/clients account system, an insurance bond allowing trading up to a certain level of turnover, or a per person insurance like TOPP).
- that Trading Standards are the people responsible for this
- why you aren't calling the Financial Services Agency (FSA) (my mention of insurance got them excited they could pass me to someone else)

4. They will then pass on your complaint to trading standards, and with a bit of luck they will investigate. No guarantees though, and while the Consumer Direct staff were friendly and helpful, I did have to pretty much explain their job and the laws to them. I do therefore worry whether the report will be passed on and investigated properly.

I agree with Dee that it would be much better if the TTA or ABTA had a single person that we or the public could contact. They could then have a central contact with the Office of Fair Trading who understands the issues and can act on them or pass them on to trading standards offices to follow up locally. That way the public would have a better chance of being protected and we'd have more faith that any companies reported would get followed up on properly.

I also recommend contacting the company itself and telling them you're reporting them. This may actually have more of an immediate effect on how they operate than going through the current official channels.
Hi Ralph,
I think this is great that you have actually taken someone to task on this issue.

There are a huge number of small operators packaging travel and not bothering to protect client monies and there seems to be no official appetite for chasing down or investigating such breaches of the Package Travel Regs. You would have thought that the past years high profile failures would have but this further up the radar but apparently not.

I am sure that as the recession bites deeper there will unfortunately be further casualties and maybe this issue will become a more important issue for trading standards.

Great post and well done for highlighting the issue.

An old post, but still relevant.  Has the process changed in the last few years?  I know a company that 100 operates without financial protection and I think even still states that they offer protection on their site.  I contacted the protection supplier and they stated they do not work this company anymore.

Hi Jo

Which country is this company based? And who is the protection supplier?

Hopefully you can answer that without disclosing, in public, who the company is..... 

Thanks. Alex

Hi Alex,

Sure it's the U.K (based in England to be specific) and the supposed cover is IGI insurance (arranged through a broker)




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