Avoid holiday hell: know your travel refund rights

Update, 7 Feb 2012. This article was written in 2010 but in light of the big freeze which disrupted travel over the weekend and into this week, much of it is relevant for many whose plans have been hit over recent days.

Holidaymakers booking a trip could be forgiven for questioning the security of their plans following high profile travel chaos over the past few years.

Millions of travellers' holiday dreams have been left in tatters following the failure of numerous tour operators. There's also been widespread disruption from volcanic ash, bad weather and cabin crew strikes.

On the bright side, if a firm goes bust or transport is cancelled, there is often plenty of financial protection, even if that cannot always compensate for the loss of a holiday.

Here, we round up your rights:

If my travel provider goes bust

Your rights vary, depending on the type of holiday booked and whether your tour operator, travel agent, airline or hotel goes under.

Package holidays

You are usually fully protected when booking a package which, technically, is a holiday consisting of two or more elements that is sold for an inclusive price (see the Cheap Package Holidays guide).

• If the package includes a flight. Here, it will be protected under the Civil Aviation Authority's (CAA) Air Travel Organisers' Licensing (Atol) scheme. This means, if the tour operator (the company that organises travel) goes under, you can continue your holiday if abroad or get a refund if still in the UK.

  If your travel agent (the middle man that sells a holiday) goes bust, this is usually irrelevant as it is not providing the holiday, as long as it has passed on the booking to the tour operator. If it hasn't, contact the Association of British Travel Agents (Abta).

  It can get complicated if you're already abroad and the accommodation provider demands payment. While you will have already paid, the tour operator may not have paid the hotel. The CAA will reimburse the hotel but smaller businesses may not be able to wait, as it can take months, so may demand the cash from you. If that happens, keep all receipts as the CAA will repay you.

  If your airline, hotel or car hire firm goes bust the tour operator must provide alternative transport or accommodation at no extra cost.

  How to claim. Contact the CAA for a refund for a cancelled holiday (see its Atol page for full details). However, the process can take months. If overseas, contact your local rep or the CAA for help.

• Packages without flights. Here, you are protected under the Package Travel, Package Holidays and Package Tour Regulations.

  The same rules as above apply, except that your holiday is not protected by the CAA but by the trade association your travel agent is a member of. In most cases, this will be Abta. It stresses most tour operators will not sell packages via non-Abta members. How to claim. Contact your travel agent to arrange a refund. If overseas, contact your rep, your travel agent or Abta.

• When a 'package' is not a package. You can sometimes buy 'flight + hotel' deals that are not from a tour operator which are especially prevalent via online booking sites. These are not always a package, technically speaking, and therefore you may not get with the same level of cover.

  Usually, if the flight is with a scheduled airline (including budget airlines) it is not a package. Sometimes, the travel firm just enters your card details on the airline's website as if you booked it.

  Abta says it's crucial to check whether the booking has an Atol number. If it does, it is a package. If you're unsure, call the firm before you pay. If it's a package, the booking conditions should state so.

  If it's not a package then see your DIY holiday rights below.

DIY holiday rights

If you book your travel and accommodation separately you have far fewer rights.

• Flight-only bookings via a tour operator. If you book a flight organised by tour operator (whether directly or via a travel agent), and it is a charter flight, it should be Atol-protected. This means if the airline or tour operator goes bust you will get a refund or be given an alternative flight (see the Cheap Flights guide).

  If you book via a travel agent and it goes bust, this should not affect your holiday as long as it has passed on your booking to the tour operator.

  How to claim. Contact the CAA for a refund (see its Atol page for full details). However, the process can take months. If overseas, contact your local rep or the CAA for help.

• Other transport or accommodation bookings. Whether you book directly with an airline, car hire firm or hotel; or via an agent (if any flight is not Atol-protected), and the travel provider or hotel goes bust, you have no compensation rights via the travel authorities or your agent. You'll only get a refund if you have suitable insurance or you paid on the right plastic (see below).

  If you book via a travel agent and it goes bust, this should not affect your holiday as long as it has passed on your booking.

If my flight is cancelled (where the airline's still operating)

Again, your rights depend on the type of trip booked.

Package holidays

You will either be offered alternative transport (whether you're abroad or still in the UK) or an alternative holiday. If still in the UK and the alternative holiday is unsuitable, you'll be refunded all elements of your package (see the Cheap Package Holidays guide).

How to claim/get assistance. If in the UK, contact your tour operator or travel agent. If overseas, contact your travel agent or rep.

DIY holidays

If your flight is from an EU airport or if on an EU carrier (when flying from outside Europe to Europe) you should get a refund or an alternative flight, under EU regulations.

• If your flight is cancelled or delayed by over five hours. Airlines must offer you a full refund within seven days of any unused ticket or, if the flight is cancelled, allow you to rebook. If you cannot get to your destination, you'll also get the return leg refunded.

  If you booked your outward and return legs separately, and your return flight goes ahead, but you were unable to reach your destination, it's more complicated. You should get a refund for the return trip as long as both flights are booked with the same carrier, but you're at the mercy of your airline.You may not get a refund if booked with different airlines.

• If taking a connecting flight. If you've already made part of your journey, and the next leg is cancelled, you are entitled to your money back within seven days for any unused flights and a free flight back to your departure point.

• How to claim a refund/rebook. Contact your airline. Many airline websites clearly explain the refund or rebooking process. If unsure, call.

Will I get costs reimbursed while I wait for my flight?

You are entitled to meals and overnight accommodation for long delays.You are also entitled to transport between the airport and your hotel plus up to two phone calls. How to claim. If your airline provides these for you, there is nothing to claim. If not, keep receipts and claim in writing from your carrier when home.

Will I get extra compensation from the airline?

If the airline is not at fault, it only has to refund your ticket and cover any expenses.

But if it is at fault you may be entitled to additional compensation of between €125 (£102) and €600 if the flight is cancelled or you are unable to board due to overbooking. The amount depends on the distance you were set to travel (see the Flight Compensation guide).

The rules also allow for similar compensation if your flight is delayed by over three hours, though claims are currently on hold pending a European Court of Justice ruling.

What about hotels and car hire?

You may have paid for other parts of your holiday in advance as well as flights or a package. These may include accommodation, car hire or other activities (see the Cheap Hotels and Cheap Car Hire guides).

Many of these may be refundable so contact the service provider to check. If you can't get your money back, see below.

If my train is cancelled/delayed

The rules on train disruption in the UK are less regimented and depend largely on the train firm you have booked with.

The Association of Train Operating Companies says: "Train companies will consider compensation for passengers whose journeys have been cancelled or delayed for whatever reason. It is essential for passengers to check with their train company.

"In terms of delayed trains, as a minimum, if your service was delayed by an hour of more, you should be entitled to some level of compensation. Contact the train company you were travelling with.

"Some train companies will consider delays of less than an hour, so it is important to check with the operator.

"The above applies for all advance, off-peak and anytime tickets, but not season tickets. For season ticket holders, operators may consider a refund depending on circumstances; contact them directly to check."

Will my insurance or card firm pay out?

Travel insurance

Travel insurance may pay out if your tour operator, airline or other service provider will not (see the Travel Insurance guide).

Some policies cover airline or tour operator failure, while it's also possible to buy cover for travel firms going bust separately.

As ever with insurance, there is never a simple answer to whether or not a policy will pay out as it depends on the circumstances and the insurer. When buying cover, if you want comprehensive protection, the cheapest option may not be the best.

What is crucial is that you get insurance when you book your holiday. As it only covers unknown events, you won't get a payout for disruption if you buy cover or your travel after you knew of that problem.

Card company refunds

If you paid for your holiday on a credit card or debit card, the plastic provider may offer you a refund but only for the part(s) of your trip funded by that card, if you didn't receive that service.

• Credit card payments. If you paid over £100 per person, per component of the holiday, under Section 75 of the Consumer Credit Act, credit card firms are jointly liable with retailers if something goes wrong (see the Section 75 Refunds guide).

• Visa/Mastercard payments. The card issuers operate a chargeback scheme, where they get your cash back from the retailer's bank if something goes wrong, regardless of the amount spent (other than a £10 minimum on Mastercard). This is not a legal requirement, but a customer service promise.

  You must notify your card company within 120 days (see the Chargeback guide).

Further reading / Key links

Make them play fair: Consumer Rights, Section 75 RefundsTravel for less: Cheap Flights, Budget Airline Fee-Fighting, Cheap Trains, Cheap Hotels, Travel Insurance