Different personnel, same circus

Blog with updated link

We had taken encouragement from the fresh faces within the CAA, yet the group-think and lack of action to address embezzlement* endures.

The CAA have long accepted reform of ATOL is much needed, yet they continue to prevaricate. They excuse their inertia as ATOL reform requires legislation, which in turn requires support from Whitehall. Yet, when it suits, the CAA find a way - such as the anti-consumer IOU’s (RCN) and the shady ‘Agent for the consumer’ 50% APC discount.

We still await the CAA’s final suggestions for ATOL reform as part of the much delayed consultation. This latest consultation was triggered by the Thomas Cook failure nearly 5 years ago and began formally in April 2021. Surely producing this document is within the CAA’s control?

As an interim measure, ahead of the September 24 ATOL renewals, we have proposed there are three levels of service charge payable to the accredited bodies to encourage a further removal of risk from the ATT.

The £1.25 and the £1.75 version already exist:

£1.25 payment: All Client payments in trust and only used to pay suppliers. The accredited body take responsibility to fulfil or refund any failures. (As now)

£1.75 payment: All Client payments in trust and only used to pay suppliers, plus insurance in place. The accredited body take responsibility to fulfil or refund any failures. (As now)

£2.50 Payment: All money is safeguarded in trust until all travel is complete. The accredited body take responsibility to fulfil or refund any failures. De minimus risk.

The best thing the ATT trustees have done is to outsource risk from the ATT to the accredited bodies. Looking back at 20 years of ATT accounts these accredited bodies are yet to make a call on the ATT, whereas those who used bonds rather than properly safeguarding Client funds have cost the ATT scheme many hundreds of millions in addition to what they have cost the tax-payer.

Embezzlement (Investopedia definition)

Embezzlement refers to a form of white-collar crime in which a person or entity intentionally misappropriates the assets entrusted to them. In this type of fraud, the embezzler attains the assets lawfully and has the right to possess them, but the assets are then used for unintended purposes.

Footnote: Should you wish to see the recent correspondence with the CAA on this topic, please click here.