Off on a DIY vacation? Financial security for dynamic package holidays

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The dynamic package holiday – in effect, a 'DIY' vacation, where flights, accommodation and other parts of the holiday are bought from separate suppliers – are becoming more and more popular.

Dynamic Package Holidays not covered by Package Travel Regulations 1992But what if things go wrong with a dynamic package holiday? "Clearly it's not as easy as just referring to a travel agent about a regulated holiday bought for a single inclusive price," says Nick Harris of Simpson Millar LLP. "And because dynamic packages are not subject to the 1992 Package Travel Regulations, which otherwise provide powerful consumer protection, there are a number of issues to watch for."

Consumers are not always aware that their holiday is a dynamic package. "Some travel companies simply act as 'middlemen', selling you a holiday and then outsourcing different elements to other firms. If things go wrong, that’s when the dynamic package holiday gets difficult."

One such issue is that of obtaining financial security for the pre-paid cost of flights and hotel reservations.

"This is where it's very helpful to pay by credit card," says Nick. "Since the card provider is jointly liable with the supplier of the services for their proper provision under Section 75 of the Consumer Credit Act, you can claim a refund if there's been a major breach of contract over a dynamic package, including misrepresentation, or if the company goes under."

However, Nick stresses the importance of the main cardholder directly paying the supplier. "If you pay an agent of the company for any part of a dynamic package holiday, Section 75 may only provide very limited cover."

"Although the value of the services must be more than £100 and less than £30,000, you don't have use your credit card for the whole amount. Under Section 75 a £1 payment secures cover, with the rest dealt with by debit card or bank transfer to avoid fees."

But how do you find out if yours is a dynamic or regulated package holiday? "Ask before you book," says Nick. "Is this holiday protected by the Package Travel Regulations 1992? If the answer is 'no', then proceed with care!"


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