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Consumer Authority enforces travel industry compliance with regulations to provide statutory guarantees

The Consumer Authority is taking action against tour operators who fail to meet their legal obligations to provide consumers with statutory guarantees for package holidays. The statutory guarantee provides protection for consumers booking a package holiday from financial losses incurred should the travel provider go bankrupt. Many companies meet these obligations by seeking affiliation with the Travel Bookings Compensation Fund (SGR). Other companies even offer the guarantee that in the event of bankruptcy, the consumer will be compensated and, if applicable, returned home. The Consumer Authority has instructed tour operators that are not complying with the regulations to do so, otherwise the Consumer Authority will begin court proceedings against these companies in the near future.

Marije Hulshof, Director of the Consumer Authority explains: "It is customary for the consumer to pay the travel costs in full in advance.  The legislator has therefore stipulated that providers of package holidays must protect the consumer should that company go bankrupt. We are now taking action against those companies who do not meet these requirements".

An investigation into statutory guarantees

In 2007, the Consumer Authority conducted a survey into the extent that the travel industry met the requirements to provide statutory guarantees in their package holidays. The Consumer Authority conducted a follow-up investigation in 2008 of companies who had previously indicated that they had not taken any measures to implement these, and of these companies, the Consumer Authority has issued a reminder to those with the largest turnover to address their obligations. This has led to some of the companies in this group implementing the necessary measures, by means of the Travel Bookings Compensation Fund (SGR) or by other means. Another section of this group turned out to be no longer of relevance as they either did not offer package holidays or were no longer in business. It did however emerge that a small section of the group still had not implemented any of the measures and in the meantime, the Consumer Authority has issued these companies with a deadline to meet the requirements. If the companies still fail to meet their legal obligations within this period, the Consumer Authority will take the companies concerned to court.

It also emerged from this investigation that the travel sector is very dynamic, particularly where small providers are concerned and therefore the issue still remains that consumers must check and find out for themselves what measures the travel provider has put in place to protect the consumer in the event of the company going bankrupt. Tour operators are required to declare what measures they have put in place.

A package holiday is a combination of travel services arranged in advance that include transport and accommodation or one of these plus another service essential to a tourist trip. 

The protection against bankruptcy of providers of package holidays as required by law means that the provider must take measures to ensure that, in the case of bankruptcy, the consumer will receive a refund for the sum paid in advance for travel, or that the provision of travel is taken over by another provider.