Procrastination is the enemy of success

Procrastination is the enemy of success and in the area of financial regulation also very costly for consumers.

The government acknowledged problems with pre-paid funerals and in 2019 decided these needed to be regulated by the FCA. Safeguarding pre-payments in Trust had been a requirement since 2001, but was not enforced. Consultations followed and the industry gave their feedback. It took until July 2022 for the FCA to be put in charge. Too late for the 46,000 people who are now out of pocket following the collapse of the inappropriately named ‘Safe hands’, with around £60 Million reported missing.

Had the public been consulted: 'Would you like the funeral company to be required to safeguard your pre-payments and be overseen by the FCA?’' It would not have taken them 3 years to decide!

The amount of money pre-paid to Travel Organisers dwarfs that paid to funeral providers and yet safeguarding pre-payments in travel is not required. This is a scandal we have commented on over many years.

The Thomas Cook failure in 2019 highlighted that taking Client’s money and misappropriating it as ‘working capital’, before you have delivered the holiday, was a significant problem in Travel. Thomas Cook failed with hundreds of millions of pounds in Client pre-payments missing. Unlike ‘Safe-hands’ there is no suggestion this was illegal as there was (and still is) no obligation to safeguard Client money. The ATOL consultation was launched in April 2021 to address this. 30 months on we still lack a final set of proposals and there are hints that measures may get watered down.

Once again the industry opinion is being asked (and asked), when the only voice that matters is the travelling public whose money it is: 'Do you want Travel companies to be allowed to embezzle your money?’'

The answer is obvious and the procrastination risks further harm.

The CAA advised last week that Luxtripper has failed. It is not clear whether pre-paid Client money was safeguarded, but their failure comes less than 3 week after their ATOL licence renewal. This poses questions about the CAA’s process of vetting licence holders. Reviews of Luxtripper suggest issues were prevalent in September before the licence renewal.

The law should be consistent in safeguarding all pre-payments, for all industries, with robust enforcement.

Safeguarding funds for ATOL bookings is just a first step. Packages that sit outside of ATOL and Flight only bookings have not even entered the early stages of procrastination as to how pre-payments will be safeguarded.