Let CAA view on government thinking be a guide

Will the saga that is consumer financial protection ever reach a conclusion? Possibly, up to a point, but not soon and not to the satisfaction of many.

Two small steps should have been taken this week. The Civil Aviation Authority’s case against Travel Republic, alleging breach of the ATOL Regulations, was due to commence and could help clarify some points. And the CAA was poised to release a summary of responses to its consultation on tripling the ATOL levy.

The former could take time to resolve. The latter will move quickly. A CAA recommendation will go to the Department for Transport this month and secretary of state Lord Adonis make a decision by September 1, with an increase in levy from October 1. That is the effect of the £60-million cash crisis in the Air Travel Trust fund.

ATOL reform will move at a snail’s pace by comparison, although the progress by autumn 2011 – around the time the CAA forecasts a £3 levy will clear the fund’s deficit – could be significant. What might we expect?

The CAA’s view of the DfT’s thinking should be a reliable guide. CAA consumer protection group deputy director David Moesli says: “The DfT is determined to make protection clearer for passengers. If it looks like a holiday, it should be financially protected.” So the rules on dynamic sales will be tight.

“The government will put consumers clearly above other considerations.” Trade concerns will be secondary.

“Consumers will expect consistency. A two-tier system is unlikely to be acceptable.” A wider scheme is inevitable, but not one that differentiates between a package – with the liabilities that brings – and something less onerous to retailers.

The grey area that has allowed companies to operate outside or unaware of the ATOL regulations will narrow. Given the problems highlighted by the failures of Freedom Direct and Harvey World Travel that cannot come soon enough.

But until it does the trade will continue to scratch a collective head and consumers believe every holiday is protected until the moment they discover otherwise.