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Avoiding travel firm failure hell

Avoiding travel firm failure hell

Category: Travel

Updated: 28/10/2010
First Published: 26/08/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Travellers planning a last-minute summer break to escape the rain are being urged to consider what sort of travel cover they might need if their operator goes out of business.

An estimated 37 million people jet away from the UK each year, usually problem free.

However, more than 50 airlines and travel companies have gone bust since the start of 2009, leaving thousands stranded either at home or abroad, and often out of pocket.

Trips booked through registered travel companies will usually be covered by the ATOL (Air Travel Organisers' Licensing) scheme, administered by the Civil Aviation Authority.

The ATOL scheme protects passengers who have flown away for a package holiday if a travel company goes bust, ensuring that holiday makers abroad are brought home at the end of their trip, and that those yet to travel are reimbursed.

However, around half of all holidays planned from the UK are not booked through registered travel firms and therefore don't qualify for ATOL protection.

For these holiday makers, taking other precautions to help protect their trips, such as taking out specific travel insurance or booking by credit card, is essential.

The cover offered by many travel insurance firms fails to do the job.

However, some protection is available through travel insurance policies offered by AA, Axa, Direct Line, Marks & Spencer Money, the Post Office and Saga.

Travel insurance is also vital to cover the cost of any medical treatment that might be necessary when abroad.

The average cost of medical care abroad in 2008 was £678, while more serious treatment, including translation facilities and transfers to more suitable medical locations, can result in a considerably larger bill.

Using a credit card to pay for a trip means holiday makers are likely to be covered by the credit card company should anything go wrong.

The credit card provider will usually have to provide a refund if the holiday company goes bust or the trip is not supplied.

While useful for booking a holiday, using certain credit cards abroad can prove expensive in terms of the additional charges made for withdrawing cash and paying for goods. Check the foreign Usage Credit Card Best Buy chart for details of cards and their charges.

Checking the terms and conditions of a credit card is a must, although the Post Office, Saga and Santander Zero cards make no additional charges for using their credit cards while on holiday.

Nationwide's Gold Card credit card makes no charge in Europe.

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.