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Low Cost Holidays Collapse & How To Claim If This Has Happened To You

View profile for Kay Ditcham
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Budget travel agency Low Cost Holidays ceased trading on Friday 15th July 2016.  Thousands of holiday makers who had upcoming holidays booked with them have lost out. The collapse happened just before the start of the school summer holidays, a time when peak numbers of people would be due to travel.  In total it has been said that around 140,000 people have been affected.

The main difficulty for those affected is that Low Cost Holidays relocated to Majorca in 2013  and because of this was no longer ATOL protected or a member of ABTA.  Some travellers may not have realised this, particularly if they had used the company before 2013. ATOL (Air Travel Organiser’s Licence) protects people who book holidays with UK travel companies.  It ensures that if the company ceases trading those people who have booked holidays do not lose their money. 

ABTA is the Association of British Travel Agents, and its members are bonded so that customers’ money is protected if they go out of business.


Those people who had booked with Low Cost Holidays did not have this protection.


Some people may be able to reclaim money via their credit card.  Section 75 of the Consumer Protection Act provides that a credit card company is jointly liable with a retailer if something goes wrong.  You don’t have to have paid the full amount on your credit card.  For example, if you have paid for your holiday by instalments and even one instalment was paid on your card you can make the claim, provided the entire cost of the holiday exceeded £100.

There is a similar scheme for debit cards, although this is voluntary.  A claim must be made within 120 days.

Finally, PayPal operates a buyer protection scheme.

It is worth always remembering to check before you book a bargain break that the company is a member of ABTA and/or ATOL.


Tilly Bailey & Irvine has a team of civil litigators who can advise in relation to contractual disputes or other issues arising out of your holiday, such as illnesses or injuries. This may not be the last we have heard of holiday firms collapsing like this as a range of factors were blamed including the Brexit result.