Less than €10 compensation for Lowcostholidays bookings

Holidaymakers whose summer plans have been ruined by the collapse of a budget tour operator have expressed frustration and anger over their poor treatment and lack of financial protection, as it emerged that they could receive compensation of less than £8 (€9.55) each.

Lowcostholidays collapsed into administration on 15 July, leaving 27,000 customers stranded abroad – including scores on holiday in Malta – and 110,000 with worthless future bookings, including many for the summer holidays. About 55% of the group’s customers are British.

Consumers lambasted the company on social media. Last Thursday, the day before its collapse, Lowcostholidays had caused a flurry of late bookings by extending a summer sale promising up to 60% off holiday prices.

On review site Trustpilot, one Lowcostholidays customer wrote: “Took our booking at lunchtime Friday, went into administration Friday pm and took money from a holding account Sunday early am!! ... What were administrators doing to allow money to be taken after the event?”

Many were angry at receiving a request for feedback about customer satisfaction, following their booking and payment, after the company collapsed.

WE BOOKED MIAMI WITH LOWCOSTHOLIDAYS........ Basically I've been ROBBED . THEYVE GONE BUST. Website CLOSED 😡😡😡😡😡😡

— Left Eye (@Marilyne_Winter) July 17, 2016

Another customer wrote: “Can’t believe I would be sent a feedback request considering I paid the balance of my holiday and within a couple of hours the company declared it went under! When I sent my payment it should NOT have been accepted and a message sent that the company was closing. Shameful and pitiful.”

In 2013, the Civil Aviation Authority (CAA) highlighted the lack of protection afforded to UK consumers when the company’s millionaire owner, Paul Evans, relocated Lowcostholidays to Spain, pulling the group out of the travel association Abta and the Atol protection scheme.

Evans sought legal advice that allowed him to start selling from Mallorca, in line with an EU directive to enable services to be sold across borders.

EasyJet, which had engaged Lowcostholidays to supply hotels for the airline’s holiday arm, ended the contract in March 2015, partly because of concerns over consumer protection following the decision to relocate the business.

On Tuesday, administrators Smith & Williamson confirmed that a bond in place for €1.3m (£1.09m) was enough to pay out only a few pounds to each customer.

Expecting “very substantial” claims from about 140,000 aggrieved holidaymakers, the administrators warned that pooled compensation was unlikely to be more than 1%-2% per claimant – potentially less than £10.