Questions of Cash: The Independent

Posted on October 1, 2011 · Posted in The Independent

Q. I booked a holiday in spring last year using flights with Goldtrail, which collapsed last summer. We have been waiting ever since for the refund. It was difficult for us to know how much the flights cost, as they were lumped together with hotel and a cruise, booked through a travel agent. Ever since, we have been asked for further information by the Civil Aviation Authority and it is difficult to know what else anyone could want. We have had to send copies of bank statements, our credit card statement and a copy of the cheque from the bank. The holiday deposit was £775.20, which we paid in April by credit card, and the balance of £2296.00 was paid on 14 June by cheque. We had to pay an extra £1196.00 in July for replacement flights. SM, Gwynedd.

Q. In July last year I bought two return air tickets to Bodrum, flying with Goldtrail and booked through a travel agency. Two days later, Goldtrail went bust. I can’t believe the agency had no idea that Goldtrail was about to go bust, but it insisted I had to wait for my refund to come through ATOL. I was promised this would take 12 to 16 weeks. Over six months later I am still waiting for my money. The travel agency has been uncontactable and offered no guidance on when I might receive my refund. The total cost of the flights was £524.28, and has been on my 22 per cent APR credit card ever since. In December I received a letter from a company called Huntswood, acting for the CAA , telling me it needed additional information. This is the only correspondence I have had. When I phone on the number provided there is an automated response which tells me they can’t speak to me now, and then cuts me off. As well as the refund for the flights, I want the CAA to pay for the interest I have had to pay on the cancelled flights. OM, London.

A When Goldtrail collapsed, PwC was appointed administrator, but refunds were the responsibility of the Civil Aviation Authority under the terms of Goldtrail’s ATOL bonding. Claims to the CAA must be processed via the travel agency that booked the flights – which caused problems for both readers. A spokesman for the CAA said it would normally process refund claims more quickly than with the Goldtrail collapse. The spokesman explains: “Goldtrail’s failure was unusual: it is rare for a travel operator to go into administration at the height of the summer, which unfortunately meant more people than usual were affected and the CAA is sorry to hear of your readers’ experiences. Our number one priority is making sure people get their money back as quickly as possible. There are still a few claims to be paid and we hope to have these settled in the very near future. The ATOL scheme is unlike an insurance policy: the funds available to provide ATOL protection to claimants is public money held by the Air Travel trust. Therefore a sufficient amount of evidence is needed to support a claim in order to validate it and pay it. If a claim is incomplete, with items such as receipts and proof of payments missing, the process can be slowed significantly as we try to establish the validity of the claim, and thereby ensure public money is spent fairly.” Both readers’ claims have now, after a wait of over six months, been processed. But the CAA is unable to pay any compensation for indirect losses, such as the cost of borrowing the money to pay for the flights.

Q. I have been charged high fees by Smile bank. It initially charged me £30 for a failed direct debit payment to my mortgage lender, First Active, which charged me an additional £25. I have two accounts with Smile, each with a fee free overdraft of £500. My mortgage is paid by monthly direct debit on the first of each month. At 8.30 am on 1 February I logged into Smile internet banking. My first account was shown with a negative balance of £700 as my mortgage direct debit had been processed. I immediately transferred funds from my other Smile account to cover this, so that both accounts were in credit. But at some point after this, Smile claimed the money back from First Active, causing me to miss a mortgage payment and charged me £30 pounds for this. I complained to Smile, which agreed to waive its fee, but has not admitted any wrongdoing, nor offered to pay the £25 that First Active charged me for the missed payment. I am angry with Smile as presumably it reclaimed the direct debit during business hours on 1 February, by when there were sufficient cleared funds in my account. ST, by email.

A The Co-operative Bank, which owns the Smile brand, says the direct debit payment was returned to your account on 1 February because there were insufficient funds in your account. “Although [the reader] transferred funds into his current account on 1 February, our terms and conditions make it clear that sufficient funds should be available at 9pm the working day before a payment is due to be made,” said the bank’s spokeswoman. “If sufficient cleared funds are not available at this time, we may decline to make a payment out of an account and the associated charges will apply. This is because many of our processes are automated.” Smile has waived your £30 fee as it has a policy that it will not invoke charges where a customer exceeds their limit only once in a year. However, it does not accept it made an error, so it is “not in the position to refund the charge incurred from the mortgage company”. The spokeswoman adds that it if you had warned Smile prior to the due date of insufficient funds, it could have arranged to manually authorize the payment.