If you are on holiday with 178-year-old British travel company, I hope you paid for the trip with a credit card; else you may be stuck in Spain or Turkey for a while, as CNBC reports.
- An estimated 600,000 travelers on vacation around the world got some bad news today: Their travel company was bankrupt and they were stranded. Thomas Cook, the 178-year-old British travel company specializing in packaged vacations, ceased operations in the early hours on Monday.
- The collapse of Thomas Cook stranded about 50,000 travelers in Greece, up to 30,000 in the Canary Islands in Spain, while 21,000 vacationers are left in Turkey and another 15,000 in Cyprus, ABC News reports. Not to mention the approximately 1 million travelers authorities estimate had future travel plans with the defunct company.
- While no one wants to think about their vacation becoming a disaster, it pays to be prepared. Here are two ways to protect yourself from having to spend big bucks if your travel company goes dark.
Safety’s in your credit card.
- “Many credit cards automatically carry travel insurance and protections to provide compensation if your trip is disrupted, as long as you used that credit card to purchase your airfare,” Keyes says. It’s best not to use your debit card when paying for your travel plans.
- Credit card purchases are protected under the federal Fair Credit Billing Act, which grants consumers the right to dispute a charge when service is not provided.
- If the travel company that went out of business, such as an airline, isn’t being cooperative with refunding your ticket or providing alternate transport, you can contest the charge directly with your credit card company. “The bank will typically erase your purchase so you’re not liable and then go to bat [directly] with the defunct airline to recoup the lost money,” Keyes says.
CNN wonders: Is this the first Brexit fallout?
- Thomas Cook’s dramatic collapse follows years of mismanagement at the tour operator and a failure to keep pace with online rivals. Brexit didn’t help either.
- Analysts say it was one of several factors that led to the 178-year old travel company’s demise, which has left 150,000 UK holidaymakers stranded abroad and cost thousands of employees their jobs.
- Thomas Cook said Monday that it had been forced into liquidation after failing to reach an agreement with banks and its major shareholder, China’s Fosun Tourism, on a £1.1 billion ($1.4 billion) rescue plan. Before being suspended, the company’s shares were down 90% this year.
Next time, take your credit card.
And, as they say, don’t leave home without it.
Overview by Brian Riley, Director, Credit Advisory Service at Mercator Advisory Group
