With an announcement by the Department for Transport that it will extend the Air Travel Organiser's Licence (ATOL) protection for refund credit notes, the UK Civil Aviation Authority (CAA) is providing further guidance for consumers.

This news provides clarity to consumers concerned as to whether their money would be secure if they chose to accept a refund credit note from their travel company following a cancellation of their ATOL protected booking.

By law, consumers with package holidays are entitled to receive a cash refund for any cancellations by the tour operator, however operational challenges have meant that some refunds have been delayed. By way of an alternative, some travel companies offered their consumers refund credit notes in lieu of cash refunds.

To ensure consumers that hold ATOL-protected bookings retain financial protection, refund credit notes issued in respect of these bookings will benefit from ATOL protection up until 30 September 2021 if they have been issued between 10 March 2020 and 30 September 2020 for an ATOL-protected booking that has been cancelled due to Covid-19.

While offering consumers a refund credit note is acceptable, travel companies must offer a cash refund at the same time. If the consumer chooses a refund credit note, they should have the option to convert it to a cash refund at any point and must do so before 30 September 2021.

Paul Smith, CAA Consumer Director, said: "This news provides much-needed clarity for consumers, who should now feel confident that their money is secure if they have chosen to accept a refund credit note for their cancelled ATOL-protected booking.

“While consumers may accept a refund credit note if offered, they are entitled to a cash refund and must be offered this option at the same time as a refund credit note or booking amendment. We have contacted ATOL holders to advise them of their responsibilities."

www.caa.co.uk/atol-protection/consumers/checking-for-atol-protection