MSE News

ATOL protection for refund credit notes extended

ATOL protection for refund credit notes extended

Refund credit notes issued up until 31 December 2020 for cancelled holidays will be protected by the ATOL scheme after it extended cover put in place due to the coronavirus pandemic - so if you accept one and the travel firm were to then go bust, you will get your money back. 

With travel firms continuing to cancel trips as a second wave of coronavirus wreaks havoc on holiday plans, many are offering 'refund credit notes' - a specific kind of voucher - instead of refunds.

In July, the Civil Aviation Authority (CAA) run Air Travel Organiser's Licence (ATOL) scheme announced that consumers who accepted refund credit notes for cancelled ATOL protected holidays would have their credit notes also protected. Originally, this protection applied to refund credit notes issued between 10 March 2020 and 30 September 2020, but it has today been extended to also cover any issued between 1 October and 31 December 2020.

This DOESN'T affect your right to a full cash refund – so if you want your money back rather than a credit note, you can still choose cash instead. And even if you do opt for a credit note, you can choose at any point up to 30 September 2021 to cash it in for a refund instead. But if you do want to show forbearance to your travel provider and accept a refund credit note, you'll be protected if the firm goes bust before you spend it. 

See Coronavirus Travel Rights for information on refunds, travel insurance and more.

How do I know if a voucher's protected?

It's important to understand that the scheme's not protecting all vouchers issued by travel firms for cancelled trips – only refund credit notes issued between 10 March 2020 and 31 December 2020 for ATOL-protected package holiday and flight-only bookings.

ATOL protection applies to package holidays including flights that are sold by UK travel businesses. It also applies to some flight-only bookings, but not accommodation-only bookings. If your booking is ATOL-protected, you should have been given an ATOL certificate when you booked.

You'll only have ATOL protection if you paid using a method that's covered by the Air Travel Trust's payment policy – if you paid for your original booking using a voucher that was issued as compensation or a raffle prize for example, you won't be covered. 

Here's how to check if a refund credit note is protected:

  • Your refund credit note must be issued by the ATOL holder listed on the ATOL certificate you got when you originally booked. The note must be directly linked to your ATOL-protected booking (whether on the refund credit note itself or the supporting documents).

  • The refund credit note should outline the amount that's ATOL-protected. You won't get ATOL protection for any vouchers paid to you separately to your ATOL-protected booking (for example, if you've been paid vouchers as an incentive, or to cover EU compensation or extras you'd booked separately to the ATOL-protected booking).

  • The refund credit note should also make it clear that it can be exchanged for cash at any point before 30 September 2021 and can't be transferred to another person. 

The CAA, which runs the ATOL protection scheme has previously said that if you're given a refund credit note that doesn't meet these criteria and you believe it should have ATOL protection, you should contact your travel company.

As well as keeping the credit note safe, it's also worth holding on to the documents from your original ATOL-protected booking – including the ATOL certificate, proof of payment and booking documents. 

Refund credit notes can be exchanged for cash until Sept 2021 

Your refund credit note's ATOL protection will last until 30 September 2021, so make sure you've spent it by that point. If the travel firm that issued the refund credit note were to collapse before you redeem it (and before 30 September 2021), you'll be entitled to its value back in cash. 

And remember that until 30 September 2021 you can also swap the credit note for a cash refund, if you don't want to use it on a new booking. If you decide to do that, you'll need to go to the travel firm that issued the refund credit note and request that it gives you a cash refund instead.

If you do use your refund credit note to make a new booking, that trip will only be ATOL-protected if it would have been anyway – for example, if you use the refund credit note to book a new package holiday. If you redeem the credit note for a booking that wouldn't usually be ATOL-protected, such as an accommodation-only booking, your new booking WON'T be ATOL-protected.  

What are my rights if my holiday's cancelled? 

If your package holiday is cancelled, you're entitled to all of your money back within two weeks under the Package Travel Regulations.

And if you have a flight-only booking that is cancelled, under EU flight delay rules (which still apply this year despite Brexit, and which cover all flights leaving the UK or EU as well as flights to the UK/EU on a UK/EU airline), you're entitled to choose between:

  • A refund for the cancelled flight
  • OR an alternative flight (airlines call this re-routing) to your destination

Even if you're offered an ATOL-protected refund credit note, you have the right to refuse it and get a full refund instead – the CAA says if travel companies offer their customers refund credit notes, they must offer the alternative of a cash refund at the same time. 

What does the CAA say?

Paul Smith, consumer director at the CAA said: “In light of the continued impact of the coronavirus pandemic on travel, the decision to extend ATOL protection for refund credit notes will strengthen consumer confidence and allow for ATOL holders to continue to offer them in good faith to their customers.

“While consumers may choose to accept a refund credit note if one is offered, they are entitled to a cash refund and must be offered this at the same time.”