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OFT stops misleading claims from Devon travel company

166/05    5 September 2005

The OFT has stopped the misleading claims of Devon-based promotional holiday company, Travelworks Ltd. 

Travelworks Ltd and its Director, Ms Nicola Hudson, have given the OFT binding undertakings to stop publishing misleading advertisements, not to rely on identified unfair terms, nor to breach the legislation relating to package travel and package holidays. They have promised to stop making claims that give the misleading impression that:

• consumers need only pay a processing fee for European holidays, or a processing fee and the flight for Worldwide holidays, when other non-optional charges also apply
• Travelworks Ltd is a company with over ten years' travel industry experience that has helped over a million families to travel, when Travelworks Ltd was only incorporated in October 2004
• consumers' money is absolutely safe when this was not the case in every circumstance, for instance in the event of liquidation.

Travelworks Ltd bought out Atlantis Vacations Ltd's promotional holiday business in March 2005 offering holidays, via vouchers handed out at holiday club presentations (see note 3), on payment of a small processing fee. Atlantis Vacations Ltd was investigated by the OFT following a number of complaints. Atlantis Vacations Ltd went into administration in March 2005 but binding undertakings were obtained from its sole director, Ms Bradshaw (press release 151/05).

Sir John Vickers, OFT Chairman, said:

'Holiday-makers need to know what they are signing up for and must not be led to believe they are getting a better deal than they actually are. The OFT and the trading standards service will stop unfair trading.' 

If the undertakings given to the OFT are breached, a court injunction can be sought. Failure to obey a court injunction may result in proceedings for contempt of court.

NOTES

1. Travelworks Ltd and Ms Hudson in her personal capacity have also agreed to abide by the terms of the Package Travel, Package Holidays Regulations 1992 (PTRs), not to publish misleading advertisements within the meaning of the Control of Misleading Advertisements Regulations 1988 (CMARs) and not to rely on certain identified terms which breach the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCRs).

2. The undertaking regulates Ms Hudson's future conduct in any business she carries on as a sole trader or a company she has a special relationship with. The Enterprise Act 2002 sets out that a person has a special relationship with a company if she is a controller of the body corporate or is a director, manager, secretary or some other similar officer or a person purporting to act in such a capacity.

3. View the OFT's booklet on holiday clubs (pdf file 305 kb) 

4. The Control of Misleading Advertisement Regulations (CMARs) 1998 aim to protect consumers and businesses from misleading advertisements and advertisements that make prohibited comparisons. The OFT's main role under the CMARs is to support and reinforce the existing advertising controls exercised by other bodies, not replace them. The OFT will step in where it is in the public interest that an advertisement should be stopped and future misleading advertisements prevented by means of a court injunction against those concerned, or by the threat of it.

5. To come within the scope of the CMARs, an advertisement must be misleading (i.e. it must deceive or be likely to deceive the recipient and affect their economic behaviour, or for those reasons harm the interests of a competitor), and be published in connection with a trade, business, craft or profession, in order to promote the supply or transfer of goods or services, immovable property, rights or obligations. The OFT can take action against anyone appearing to be concerned or likely to be concerned with the publication of a misleading advertisement.

6. The Unfair Terms in Consumer Contracts Regulations 1999 apply to standard contract terms used with consumers. The UTCCRs protect consumers against unfair standard terms in contracts they make with traders. The OFT, and certain other bodies, can take legal action to prevent the use of potentially unfair terms. A term is likely to be considered unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations under the contract, to the detriment of consumers. The regulations say that a consumer is not bound by a standard term in a contract with a trader if that term is unfair. Ultimately, only a court can decide whether a term is unfair.

7. The Package Travel, Package Holidays and Package Tours Regulations 1992 apply to anyone who sells package holidays. The Regulations set out the responsibilities of tour operators and retailers to their customers and the options available to consumers in the event of a breach of them. The Regulations cover provision of accurate information, rights to cancel due to significant alterations to the contract or significant price increase, transfer of bookings and brochure information.

8. If a package holiday involves air travel the insolvency protection will be through the ATOL system. ATOL protects consumers from losing money or being stranded abroad if a tour operator goes out of business. Further information is available on the ATOL website.

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