Business

Low Cost holidaymakers likely to get just £7.78 refund

holidaymakers in Spain Image copyright Getty Images

Thousands of holidaymakers who booked travel with Low Cost Holidays may get a refund of just £7.78 each, the BBC understands.

The firm went into administration last week, leaving 27,000 customers abroad, and 110,000 with future bookings.

It was not registered with the UK government-backed Atol scheme, which would have compensated them in full.

Instead it had lodged £1.09m with authorities in Mallorca - enough to pay out just a few pounds to each customer.

A spokesperson for the administrators, Smith and Williamson, said: "It is only once claims are finalised that a specific figure for compensation will become evident. However, it does seem that the amount of compensation for holidaymakers will, very unfortunately, prove to be negligible - around 1 or 2%."

Those currently abroad are having to pay for their hotel accommodation again, as well as other incidental costs.

'Profiteering'

Simon Holt, from Skipton in Yorkshire, had to pay an extra £1,000 so that his daughter and her friend could stay in their hotel in Portugal.

As Low Cost had booked the flights directly with Ryanair, they were also unable to check in for a return flight online, so will have to pay an extra £45 each.

"I think it's appalling," he told the BBC. "This is sheer profiteering, because I can't see how they incur any additional costs."

The airline said: "All Ryanair customers can check-in online and download their boarding passes by entering their flight details, booking reference or credit card details, or can also use our mobile app. Any queries regarding Low Cost Holidays are a matter for Low Cost Holidays."

Image caption An email extending the sale was sent out on the day the company went bust

Several holidaymakers have complained that they received an email from the company on the day it went into administration - Friday 15 July.

It said the sale was being extended until today - Tuesday 19 July.

"A friend and I were hoping to get away in September, and having received the email I started looking," said Keeley Middleditch from Oxfordshire.

"Thank goodness I didn't book," she told the BBC.

'Do a deal'

Mr Holt's daughter Rebecca also had to pay again for airport transfers.

Some travellers may be covered by their insurance, providing they paid for "supplier failure".

Those who paid by credit card will also be able to claim compensation from their card issuer.

Bob Atkinson, from Travelsupermarket, advised those abroad, or heading out on holiday, to pay for their rooms and try to claim compensation later.

"My advice is to do a deal with your hotel, because otherwise you're out on your own, trying to find something," he said.

It is thought that Low Cost Holidays left Atol in 2013.

Its collapse has been blamed on the fall in the value of the pound following the EU referendum result, as well as the global terrorism threat.

Related Topics