Beware of Gap Year Companies That Offer No Bonded Financial Security
Consumers should be advised that not all the organisations who are advertising gap year and volunteer travel on the web have proper financial protection in place. In fact some organisations are not bonded and are breaking the law.
Does this really matter?
You bet it does! It means that you will lose all the money you have paid in the event that the organisation that you booked with goes bankrupt.
Yes, but that’s surely unlikely to happen isn’t it?
Not that unlikely actually. Travel companies are notorious for going bust in the winter, when big bills come in from the summer, and revenues from paying consumers are down. Cash flow is a key component in keeping companies going, and if the cash starts to dry up, then trouble will follow.
There are now over 100 organisations in the UK marketplace for gap year travel. This is significantly more than 5 years ago in 2008 at the top of the gap year boom. So in 2013 more companies are out there chasing fewer gap year customers. Inevitably some of these organisations will fail financially, and if they are not bonded, then their customers stand to lose all the monies paid to them. Worse, their customers could be stranded overseas.
Some of the 100+ organisations are not even UK based, but offer their trips on the web in the UK. If they go bust you have no chance of getting your funds back. While they may offer a cheaper price, it is cheaper for a reason, and that’s because for starters, they don’t have the costs of providing a financial bond. (Also, consumers often end up paying much more than planned due to currency fluctuations and extra charges).
The Year Out Group, the gap year industry’s association, is not very clear on financial security either.
Some of their members provide protection by Directors Guarantee, but if their companies have gone bust, there is a good chance that the Directors might be bust too, and the “guarantee” won’t be sufficient to refund all their customers.
The only way to be 100% safe is to book with an organisation that can prove they have provided a financial bond and therefore that bond will repay consumers in the event of financial failure.
Here’s a simple three point plan that will guarantee your financial safety when booking a gap trip.
- Do not book with an organisation based abroad. They may look cheap, but if there are often hidden charges or unfair cancellation penalties, and if they go bust you will lose all the money you have paid.
- Only book with a UK organisation that has provided a bond and has 100% secure financial provision in place, such as membership of TTA or ABTOT.
- Read their terms and conditions carefully. If you can’t understand the terms, don’t book with them, and make sure that there are no “hidden charges” or onerous cancellation penalties.
David Stitt, Managing Director Gap 360.