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Low Cost Holidays fold: advice for World First policyholders

Last Friday, Low Cost Holidays Group went into administration. Unfortunately 27,000 customers who are currently abroad, as well as 110,000 customers with future bookings, could be left severely out of pocket - with no promise of compensation.

Here’s what you need to know.


Can you get compensation?

Maybe. But it’s complicated.

Unlike the majority of holiday retailers used by UK customers, Low Cost Holidays were not backed by any financial protection schemes such as ATOL or ABTA. While UK-based travel firms are legally obliged to opt in to compensation programmes that protect the customer against financial failure, Low Cost Holidays were based in Majorca and could sidestep the regulations.

These rules mean that it’s very rare for UK travel insurers to provide protection against “supplier failure” - and World First is one of many insurers who unfortunately cannot issue compensation on Low Cost Holiday’s behalf. At the time of writing, a statement from Low Cost Holidays’ administrators suggests customers may only be able to successfully claim £7.78 of compensation.
Compensation through your credit card company

Now for the more positive news.

If you booked your holiday on your credit card, your card issuer should be able to give you a full refund on any Low Cost Holidays booking that is no longer being honoured - as long as your payment was in excess of £100. Contact your card issuer to find out more.
If you are currently on holiday...

27,000 Low Cost Holidays customers are abroad right now. The company has said that return flights have been paid for. That means you should be able to fly home as normal. Some customers however are being recharged locally for accommodation - and you may have to rebook airport transfers. Unfortunately World First cannot help you recover these costs.

Our advice would be to check your return flight validity directly with your airline as soon as possible. Make a note of any additional costs you incur (and keep receipts) in case you are able to claim the money back from Low Cost Holidays at a later date.
If you have a future booking...

The first thing to do is check directly with your airline and accommodation provider whether your bookings are secure. If they are, get written confirmation. The same applies for any extras that were part of your package - such as airport transfers, airport parking and so on. If the end-retailers have no record of your booking, the unfortunate news is that you have lost your holiday - unless you want to rebook and pay all over again. (Remember: you can claim a full refund if you booked your holiday on your credit card - see above.)
Get a refund on your World First travel insurance policy

If you booked single trip travel insurance with World First for your Low Cost Holidays trip, you can use your policy to cover a different holiday later in 2016. Just call us on 0345 90 80 161 and we will update your policy dates and details for you free of charge. Alternatively you can cancel your policy completely and get a 50% refund.
Any questions? Please let us help.

When you have been looking forward to a holiday, it’s incredibly upsetting to find out that you may have been left out of pocket - through no fault of your own. What’s even more infuriating is the fact that it's unlikely you will be able to get through to anyone from Low Cost Holidays. But if you have any questions about how your World First cover relates to any Low Cost Holidays booking, please do not hesitate to call one of our UK customer service team on 0345 90 80 161. We will do our best to help.

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