July 24 2014 Latest news:

Millions more holidaymakers will find themselves protected under changes to the Atol insurance scheme announced by the government.

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Since the scheme was set up in the 1970s, full refunds or repatriation has been offered to people whose package holiday companies have gone bust.

However, there has been growth in the number of so-called “flight-plus” holidays in recent years, and these holidays are not covered by the Atol scheme.

A flight-plus holiday involves a customer buying a flight and accommodation and/or car hire together, either on the same day as the flight, the day before or the day after, from the same travel company.

A spate of airline and holiday company failures in recent years has prompted the government to extend the scheme.

“The Atol scheme has been providing peace of mind for holidaymakers for decades, but the way we book holidays has changed and the scheme needs to move with the times,” said aviation minister Theresa Villiers.

“All too often, customers are unsure as to whether they are protected or not.

“The changes I am making will provide much-needed clarity and reassurance for millions of people booking their holidays.

“These reforms will equip Atol to deal with the realities of the modern holiday market, enabling the scheme to protect holidaymakers for many more years to come. This is an important step forward for consumer protection.”

As well as extending the scheme, the changes from April 30 will include passengers being given standard certificates at the point of purchase, confirming their trips are protected under the Atol scheme.

It is hoped this will address the confusion that sometimes exists, with passengers often unsure whether or not they are protected.

Abta, the trade association for tour operators and travel agents, described the news as “a major step forward in improving outdated holiday protection”, but it called for further action.

It said that although the change would see an estimated six million more holidays brought into financial protection as a result of the reforms, nearly 45pc of the holiday market would remain unprotected.

“Abta has long called for reform of the Atol scheme of financial protection to ensure that it provides greater protection and transparency for consumers,” said Abta chief executive Mark Tanzer.

“We believe all holidays, however they are booked, should be financially protected. The package of reforms announced today – most notably the extension of protection to include flight-plus holidays – mark a significant first step to improving a system that is outdated, unfair and confusing.

“We consider the inclusion of holidays sold by airlines an essential second step.

“While we are pleased the government acknowledged the need to include these today, we urge it to act swiftly to introduce the necessary legislation to make this happen.”

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