Low Cost Holidays (part of the Low Cost Travel Group) has today announced that it has ceased trading. Their collapse casts uncertainty on the holidays of thousands of bookings on the eve of peak holiday season.
It is estimated that over 140,000 holidays have been plunged into turmoil as the travel firm, based in Spain, has appointed Smith & Williamson and CMB Partners UK as joint administrators to the business.
The firm has admitted that many of the accommodation bookings placed through them have not been paid for. It is also thought that around 1,000 of its customers have booked and paid for flights but the money has not been passed to the airline(s).
Low Cost Holidays is not covered by Air Travel Organisers’ Licensing (ATOL), a government backed scheme which protects people who have purchased package holidays, meaning families are at risk of loosing all their money. Those who are not be covered by travel insurance (supplier failure), will either have to pay for their holiday twice, find alternative accommodation, or cancel their trip altogether.
I am currently on holiday with Low Cost Holidays. What should I do?
If you are currently on holiday, the information from the administrator is that your return flight should still be valid. However there are reports that some travellers have been asked to pay in resort for the accommodation, car hire, transfers and other extras in order to continue staying in situ or using the products. If this is the case, the advice would be to do a deal directly and make the payment, ideally using a credit card, and obtain a full receipt. You can then use the receipt as evidence when submitting a claim (as detailed below) upon your return to the UK.
I have made a booking with Low Cost Holidays, but have not travelled yet. What should I do?
You need to contact the Airline, Hotel, Transfer or Car Hire Company, Car parking etc as soon as possible.
According to the administrator, your tickets should in the majority of cases, still be valid. This is because flights are usually paid for in full at the time of booking.
All other elements booked through Low Cost Holidays such as hotel, transfers, car hire, excursions etc are most likely not valid. They will therefore need to be rebooked. If a supplier informs you that an element has been paid, get written confirmation from them. This will help to avoid any issues when it comes to using that element on your holiday.
Can I get my money back?
According to the Spanish regulators, if you have booked a combination of flight and hotel, you can try to reclaim from Govern de les illes Balears, the regulator of the Spanish travel agency. However from information they have published, Low Cost Holidays have a “limited warranty” with €1.2 million set aside to compensate customers who booked both elements at the same time. English-language instructions on filing a claim have appeared on their website.
You should in some cases be able to claim from your credit/debit card company. However what you can claim depends on the amount paid and method used.
Credit Cards: If you paid (even as little as 1p of your booking) using a credit card then you can try and claim for the full amount of the holiday against the credit card issuer under Section 75 of the Consumer Credit Act. The credit card company are jointly liable under this legislation along with the retailer. This means that should something go wrong, such as a company go bust, you can submit a claim.
Debit Cards: Debit card issuers operate a similar scheme to their credit card counterparts called “Chargeback”. This allows you to get your money back if something goes wrong. However this is purely done as good customer service and is not a legal requirement.
PayPal: If you paid using PayPal, you should be covered under their Buyer Protection Scheme. You must raise a dispute through PayPal within 180 days of the date of payment to qualify.
Can I claim on my travel insurance?
It depends. Some policies offer what is know as “supplier failure cover”. This however is not standard and will differ depending on the specific policy you have. Please check with your insurance company as soon as possible who will be bale to advise you further.
How can I stop this from happening to me?
Always book with a Travel Agent that is ATOL protected. There are many “cheap deals” available on the internet. However cheap is not always best. Many of these offers are from retailers not based in the UK and do not offer the ATOL Protection.
For added security, look to book with retailers who protect your money further. Holiday Hamster keeps all money paid in a special customer Trust account, until payment is due to the supplier(s).
Finally, if possible, make payment for part of the purchase (even 1p) using a credit card. This would mean that should everything else fail, you can then look to claim from them.
Have you been affected by the collapse of Low Cost Holidays? Are you looking for a reliable supplier to rebook part or all of your holiday? Call Holiday Hamster on 08000 988 955 and one of our agents will be happy to assist you.