AITO suspends consumer promise

The Association of Independent Tour Operators has suspended its 100% financial protection guarantee to travellers amid concern that insurance companies could suddenly withdraw cover which ensures customers get their money back if members go bust. The move follows the withdrawal of cover from a schools skiing operator which ceased trading, leaving its clients out of pocket. AITO says the insurer blamed the operator for failing to disclose certain facts when organising its policy. The insurer was able to do so because of a badly drafted clause in the Package Travel Regulations which left open a previously undetected loophole. AITO says its individual member operators will continue to offer their own guarantees but that it cannot continue to do so as an association because of the remote possibility that customers of another company might be similarly hit. Many of those members hold bonds approved by the Civil Aviation Authority, which can be used to refund customers due to travel or rescue those abroad when company goes bust. Those companies and their clients are not affected. But 23 AITO member firms have resorted to the perfectly legal, Government sanctioned alternative of taking out insurance with the same aim. The Association is exploring ways of plugging the loophole and hopes suspension will be temporary. Meanwhile it has asked all relevant insurers to “sign in blood” confirmation that they will not cancel polices in similar fashion and will honour them if operators go under.