When travel providers go bust

The recent collapse of Thomas Cook has Kaye wondering what recourse travellers have when their travel companies fail.


Q. Kaye
I watched with horror as many hundreds of people were stranded overseas in the wake of the collapse of Thomas Cook travel recently. I have travel booked for early next year through a different travel provider (thankfully) but I was wondering what rights passengers have in these situations. Is this sort of thing covered by travel insurance? Do we have more protection if we use Australian travel companies? Are there ways to save your holidays in this situation?

customers standing outside closed thomas cook travel agency outlet

A. The Thomas Cook situation and a few other travel collapses have certainly provided plenty of information about what to do and not to do in these situations.

One of the best things you can do to protect yourself is to pay for your holiday on your credit card, rather than paying directly with cash. This way, if your travel company does go bust you can immediately contact you bank and request a chargeback, which should see the money automatically returned to you. It is important to act fast in this situation as some banks will impose time limits on chargebacks.

Unfortunately, it has been shown that not many travel insurance policies cover for a travel company going belly up. A number of the insurance policies that do offer this protection are actually offered by the travel companies themselves, which is not ideal when you think about it.

There are some policies that offer protection if your hotel or airline go broke, which is some comfort, but if the whole booking company goes kaput, your holiday is at serious risk and your best bet is trying to recover your money through a chargeback.

Have you ever been caught out by a travel provider going bust? What redress were you provided?

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