Cooper’s intervention on Thursday (28 July) came after the CAA earlier this week revealed that there was still more than £54 million of consumer cash tied up in unspent RCNs, which will lose their Atol protection at the end of September.
The CAA on Tuesday (26 July) urged consumers to make a booking using their RCN, or request a cash refund. “With more than £50 million of refund credit notes remaining unspent, this affects consumers booked with some of our biggest travel companies," said the CAA’s head of Atol Michael Budge.
Cooper has been a vocal critic of RCNs and companies that have issued them, comparing them to IOUs "bankrolling" companies. “We’re relying on people holding RCNs to read the CAA’s warnings in the media," said Cooper. "The reality is that the majority won’t, and these people are at serious risk of losing money they have paid out and losing their Atol protection.
"The CAA has to mandate – and enforce – travel companies who have issued RCNs to write to their customers and remind them of their right to a cash refund, their RCN expiry date and that Atol protection expires on 30 September. That’s the least people deserve when their money has been bankrolling these travel companies for, in some cases, up to two years."
Cooper continued: "We have repeatedly highlighted the problems with RCNs; people’s hard-earned cash should not be lining the pockets of the travel companies who, during the pandemic, used these ‘IOUs’ as a short-term solution to their own cash flow problems. I am urging anyone who has an RCN to call their travel provider today and ask for a full refund in cash."
He said mandatory trust accounts, including for airlines, would be the best way to ensure protection. On the Beach is the largest Atol holder to operate a trust model. The CAA is looking closely at the role of trust accounting as part of its plans to reform the Atol regime.
"Going forward, the best way to ensure consumers are protected is to introduce mandatory trust accounts across the sector, including airlines," said Cooper. "This would require everyone, as we do at On the Beach, to ring-fence customer monies rather than use them as working capital.
"Consumers can then be confident that their money is safe and that they will receive a speedy refund if their flight or package holiday is cancelled. The CAA must speed up its Atol reform consultation process and move quickly to introduce mandatory trust accounts across the whole sector."
