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Thousands of British holidaymakers were today stranded abroad following the collapse of a holiday firm.
Around 16,000 people are trapped outside the UK and a further 2,000 due to fly to Greece and Turkey this weekend have had their holidays cancelled.
British firm Goldtrail went into administration at 4pm yesterday, grounding planes with immediate effect.
There is a great deal of misinformation regarding how to obtain a refund, if one can be obtained at all and how long it will take. If the customer paid with a credit card, then even if only part of the holiday was paid for, the full cost of the holiday may be claimed from the card issuer as the credit card company are equally liable under s.75 of the Consumer Credit Act 1974.
For a credit card company to be liable, the cash price of the goods or service must be over £100 and under £30,000 and there must be a claim for breach of contract or misrepresentation against the supplier. It would appear that these conditions are satisfied therefore, customers will be able to make a claim against their credit card company. Section 75 of the Act makes a connected lender jointly and severally liable with any supplier for any breach of contract or mis-representation by the supplier. As above, the provisions apply to any single item to which the supplier has attached a cash price of between £100 and £30,000. Thus card issuers are potentially liable not only for the value of the card transaction itself but also the value of the item (if greater) and any consequential losses caused arising from the breach or misrepresentation.
Thus, if a holiday cost £1750 and even if only £300 was paid as a deposit, then customers may still claim the full value of the holiday, not just the amount paid.
The good news is, customers can withhold this sum when they come to pay off their next credit card bill, but they must provide proof that they have a valid claim against the supplier for breach of contract or misrepresentation, which in the case of Goldtrail is easy to quantify.
Normally, a customer would pursue any claim initially against the supplier who is directly liable for any breach of contract or misrepresentation before withholding money from the credit card company, but since the supplier is in administration, customers may simply issue a claim against their credit card issuer, notwithstanding that they have the choice of which party to pursue in any case.
Section 75 states (among other things)
In summary, customers are not obliged to pursue the tour operator, or ATOL, or their insurance company, administrators, liquidators or anybody else and their claim is not limited to the amount of the credit card transaction. Affected customers may claim for all losses caused by the breach of contract and this applies even if all they have paid so far is the deposit. Once the deposit is paid using a credit card, this gives customers the choice of claiming for the cost of the holiday and any consequential losses against the supplier of the holiday, their credit card issuer, or both. Nobody is entitled to double recovery however and will only be paid once. Since the tour operator has gone bust, customers should pursue their card issuers for refunds.
The above applies to credit cards only, however Visa Debit cards are similarly protected under the Visa Debit Chargeback scheme, but claims must be submitted within 120 days of the failed transaction.
Holidaymakers who have paid in cash will need to make claims via ATOL and will be subject to travel industry bonding arrangements, which can take considerable time.
Around 16,000 people are trapped outside the UK and a further 2,000 due to fly to Greece and Turkey this weekend have had their holidays cancelled.
British firm Goldtrail went into administration at 4pm yesterday, grounding planes with immediate effect.
There is a great deal of misinformation regarding how to obtain a refund, if one can be obtained at all and how long it will take. If the customer paid with a credit card, then even if only part of the holiday was paid for, the full cost of the holiday may be claimed from the card issuer as the credit card company are equally liable under s.75 of the Consumer Credit Act 1974.
For a credit card company to be liable, the cash price of the goods or service must be over £100 and under £30,000 and there must be a claim for breach of contract or misrepresentation against the supplier. It would appear that these conditions are satisfied therefore, customers will be able to make a claim against their credit card company. Section 75 of the Act makes a connected lender jointly and severally liable with any supplier for any breach of contract or mis-representation by the supplier. As above, the provisions apply to any single item to which the supplier has attached a cash price of between £100 and £30,000. Thus card issuers are potentially liable not only for the value of the card transaction itself but also the value of the item (if greater) and any consequential losses caused arising from the breach or misrepresentation.
Thus, if a holiday cost £1750 and even if only £300 was paid as a deposit, then customers may still claim the full value of the holiday, not just the amount paid.
The good news is, customers can withhold this sum when they come to pay off their next credit card bill, but they must provide proof that they have a valid claim against the supplier for breach of contract or misrepresentation, which in the case of Goldtrail is easy to quantify.
Normally, a customer would pursue any claim initially against the supplier who is directly liable for any breach of contract or misrepresentation before withholding money from the credit card company, but since the supplier is in administration, customers may simply issue a claim against their credit card issuer, notwithstanding that they have the choice of which party to pursue in any case.
Section 75 states (among other things)
75. — (1) If the debtor under a debtor-creditor-supplier agreement falling within section 12(b) or (c) has, in relation to a transaction financed by the agreement, any claim against the supplier in respect of a misrepresentation or breach of contract, he shall have a like claim against the creditor, who, with the supplier, shall accordingly be jointly and severally liable to the debtor.
The above applies to credit cards only, however Visa Debit cards are similarly protected under the Visa Debit Chargeback scheme, but claims must be submitted within 120 days of the failed transaction.
Holidaymakers who have paid in cash will need to make claims via ATOL and will be subject to travel industry bonding arrangements, which can take considerable time.
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