What to do if your holiday firm goes bust

TRAVEL firm Holidays 4 UK has gone into administration with 12,000 of its holidaymakers abroad and leaving thousands more scrabbling to rebook their trips.

All those abroad with the Brighton-based firm, which also traded as Aegean Flights, selling packages and flights primarily to Turkey, will be brought home, according to the Civil Aviation Authority.

The Association of British Travel Agents said the company also had 20,000 forward bookings, which would now be cancelled, although holidaymakers should get their money back under the Atol (Air Travel Organisers' Licensing Scheme) guarantee.

PricewaterhouseCoopers, which has been appointed administrators, said passengers who had booked with the company for future flights, should not travel to the airport.

Those on packages booked via a travel agent should contact the agent who will attempt to rebook them.

If you had bought flights, your first port of call is Atol. As the company in question had an Atol bond you should be able to claim your money back. Claim forms are available on http://www.caa.co.uk/default.aspx?catid=27&pagetype=90&pageid=12372. If for any reason you can't get your money back from Atol, then you should check your travel insurance to see if there's any cover provided under their policy's terms and conditions. This used to be rare but, given the propensity of holiday firms to implode over the recession, is now becoming more commonplace.

Finally, if the holiday was paid for with a plastic card there might be some protection. If the consumer paid with a credit card they might be able to claim under section 75 of the Consumer Credit Act.

However, this only covers the main cardholder, not joint cardholders, and only, strictly speaking, in respect of their own individual travel arrangements. That said, where a joint-cardholder books for the main cardholder, and so they can be said to have lost out, banks may be sympathetic. They may also take a more lenient view of the "main cardholder cover" only, where his or her holiday can be said to have been ruined if spouses or other family members lose out.

Where travellers paid with a debit card the card provider might be able to attempt a "charge back" to reverse the transaction, but again this will depend on the circumstances.

The bigger problem is where you come to rebook so close to departures, flights may cost significantly more. Or you may not be able to get any, which could mean losing accommodation.

Unless the landlord or hotel is sympathetic, you will lose your deposit and most likely be asked to pay up in full.

So when booking, don't take risks. Always ask what protections are in place in the event of a collapse. If your holiday is not obviously Abta or Atol covered then you must make other arrangements.

Buy insurance and read the small print. A few have launched "independent traveller" policies which will protect you against this type of collapse, and also pay for unused accommodation. The Post Office, M&S annual policies and Axa Direct contracts will pay up if an airline goes down. Swiftcover allows travellers to bolt on the protection for an extra 1.

The Post Office includes as standard cover maximum 1,500 compensation should your airline go down, with M&S offering a 6,000 maximum and Axa 3,000. A Post Office spokesman said: "We would not necessarily pay up in every case of holiday company failure. Travel agents and tour operators should be covered by the Abta and Atol bonds and their customers should claim against those first.

"But if they can't get redress that way, then almost everyone else should be covered by our policy. It will depend on their individual circumstances."

• For more information: Holidays 4 U customers who are abroad and in difficulty should phone 0044 (0)161 444 5810. Customers with forward bookings requiring refund advice should phone 08444 933037.