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Following the cessation of trading at lowcosttravelgroup, The UK Cards Association is providing guidance on those protections available to consumers who have purchased travel or a holiday package using a debit or credit card.

We are in regular dialogue with lowcosttravelgroup’s administrator Smith Williamson and will update this page as we find out more information.

Chargeback for credit and debit card purchases

There is a mechanism for your card issuer to reclaim money from the retailer's bank where you do not get the goods or services you paid for, including if the retailer has gone out of business. This is called a chargeback.

Chargeback is not a legal right. You should address a chargeback claim to your debit or credit card issuer, which in turn will put in a request to the retailer's bank. The process for managing these claims is determined by a set of rules from American Express, MasterCard or Visa. There are no guarantees your issuer will be able to recover the money through chargeback, but they will assess your claim fairly. With a chargeback, the value claimed cannot exceed the value of the original holiday that had been purchased.

Section 75 for credit card purchases

When using a credit card, you may also have what is known as Section 75 protection. This provision (part of the Consumer Credit Act 1974) protects you if you use your credit card to buy something costing more than £100 and up to £30,000.

There are certain requirements that need to be fulfilled for a Section 75 claim to be available. The company from whom you bought the goods or services must be the supplier of those goods and services. There is more information about this below.

You are legally entitled to get your money back if the supplier you bought the product or service from:

  • breaks their contract with you, including if they go out of business; or
  • does not deliver what they have promised;
  • You are even able to claim if you only used your credit card to pay for part of the cost of what you bought. The protection may also cover any losses you have over and above the original amount you paid or if you incur additional reasonable costs to get back home.

More detail on chargeback and Section 75 claims can be found in our consumer guide to credit and debit cards.

Making a chargeback or Section 75 claim in relation to lowcosttravelgroup

If you have booked flights, accommodation, car hire or airport transfers from lowcosttravelgroup but the supplier of these services has not been paid and your booking has been cancelled, you are likely to be able to reclaim some or all of what you have paid through, firstly, the chargeback mechanism or as a consequence of your rights under Section 75.

If you wish to make a claim this will need to be supported by documentation you would have received from lowcostholidays such as: the original booking confirmation; the invoice; or any receipts for any additional expense. If you do not have your booking confirmation you can get it from the following website:
https://mmb.lowcostholidays.com/Login.aspx. Please note that this ‘manage my booking’ facility will be disabled with effect from 5PM Friday 19 August 2016. Your card issuer can assist you to identify the documents that will be needed to support your claim.

Below we have set out information applicable to different scenarios which customers find themselves in. There are some differences in what can be claimed, depending on the type of card that you have used.

Chargebacks

If you have paid in full for your holiday, and have not used any services (such as flights or accommodation), and none of them are available, because the supplier has not been paid and has cancelled the reservation:

  • If you paid on debit or credit card, you should be entitled to a full refund of the payment that you have made to lowcosttravelgroup.

If you have paid in full for your holiday, and have not used any services, but some of these services are available, eg you have flights that you can use:

  • If you have used a MasterCard you should be eligible for a full refund of the full invoice amount, including any services that you have chosen not to use if the flight and the rest of package were advertised/invoiced/sold as a single item. You will need to provide documentary evidence to show that the services were clearly sold together as a package eg a single invoice. This applies even if you have been billed separately for the flights. Where the flight was a separate, distinct purchase and it was available to be used then you will not be eligible for a refund if you chose not to use it.
  • If you used a Visa card you should be eligible for a refund of the value of the services that are not available.

If you have paid in full for your holiday, and have used some of the services (eg flight) and some of the other services are available:

  • If you paid on a debit card you should only be eligible to claim up to the value of the original services that you have not used.

If you have paid a deposit for the holiday, have used some or none of the services and none of the other services are now available:

  • In all cases you should be eligible to claim up to the value of the deposit you have paid less the cost of any services that had been used.

Section 75 – applicable to credit cards only

If you have paid with any type of credit card, you may have a claim under Section 75.This may cover losses in addition to the price paid, eg if you have to pay more to get accommodation You do have a duty to ensure that any additional costs are reasonable and proportionate. You will be required to provide supporting evidence to support any claim. We strongly recommend that you talk to your credit card provider before incurring additional costs to see if you will be covered.

To make a claim to your card issuer, you will need to provide supporting paperwork that could include:

  • The invoice from lowcosttravelgroup
  • Details of which elements of the package or separately-booked elements have been or not been used.

Your card issuer will advise you on what you will need to provide.

Please note:

  • The amount claimed should be reasonable and fair, on a like for like basis e.g. if it was a three-star hotel it should be replaced by a three-star hotel for the same amount. Bear in mind that, if Section 75 does not apply, if your claim is successful you are likely only to receive a refund for the amount you originally paid.
  • If you decide to pay locally for any services, you should keep receipts of any payments as these will be needed to support any refund or compensation claim you may make to your card issuer.

Further details can be found on lowcosttravelgroup’s website here http://www.lowcosttravelgroup.com. This includes details on the status of the holiday components e.g. the flight may still be valid but that other suppliers such as hotels may now need to be paid locally.

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