ASA Adjudication on Thomas Cook Retail Ltd

Ad

Two TV ads and a national press ad for Thomas Cook Retail (Thomas Cook).

a.vThe voice-over in the first TV ad stated "In these uncertain times, who else could promise you that your money's safe? As Britain's longest-standing travel agent, Thomas Cook offers a 24-hour money back guarantee on everything you buy From flights to hotels, cruises to holidays, whatever you book with us, we promise your money is safe." On-screen text stated "Applies to bookings made between 26 December 08 and 16 February 09 for departure after 1 May 09. Terms and conditions apply."

b. The voice-over in a second TV ad stated "In these uncertain times, as Britain's favourite travel agent, we promise whatever you book with us your money's safe. From flights to hotels, cruises to holidays, everything you buy from us is covered by the Thomas Cook 24-hour money back guarantee …" On-screen text stated "24 hour guarantee applies to bookings made between 26/12/08 & 16/02/09 for departure after 01/05/09 if companies cease to trade. Terms and conditions apply."

c. The national press ad stated "Whatever you book with us, we promise your money's safe". A logo stated "24 HOUR MONEY BACK GUARANTEE". Small print at the side of the ad stated "24-hour money back guarantee offer applies if your travel supplier ceases to trade prior to travel commencing. Applies to bookings made with Thomas Cook until 16 February 2009, where departure date is after 1 May 2009. 24-hour period commences from when Thomas Cook receives all necessary documentation from you, required by Thomas Cook, the CAA or other applicable bond administrator. Refund will be given for travel services to be provided by the failed supplier."

Issue

1. Five viewers challenged whether TV ads (a) and (b) were misleading, because they believed the money back guarantee could not be fulfilled if Thomas Cook themselves went into administration;

2. One of the viewers challenged whether ad (a) made clear the nature of the guarantee;

3. Another of the viewers challenged whether the money could be refunded within 24 hours, because he believed ATOL processes took longer; and

4. Another of the viewers challenged whether press ad (c) was misleading for the reasons outlined in point 1.

CAP Code

BCAP TV Code

Response

1. & 4.  Thomas Cook said, as a member of ABTA (Association of British Travel Agents), they were required to provide a retail bond to protect consumers so that if they ceased to trade as a travel agent the consumer could claim a refund of any monies paid.   They said in practice, however, it was very unlikely that a consumer would have to claim under that bond, because in the vast majority of cases they would still be entitled to receive their travel arrangements from the supplier, despite the agent having ceased to trade.  They said, even if the travel agent ceased to trade prior to passing on the consumer's payment to the supplier, the supplier would still have to honour the contract as that was usually formed straightaway when the booking was made, and therefore the supplier rather than the consumer would be out of pocket.

They sent documents issued by ABTA that confirmed the need for ABTA travel agents to provide a bond or other applicable security to protect consumer payments, and explained that the fact that Thomas Cook had a bond in place meant that in the unlikely event of Thomas Cook Retail ceasing to trade as a travel agent, those customers who had a contract with a third-party travel supplier would either still receive their holiday or would receive their money back under Thomas' Cook's ABTA bond.  Those consumers who had a contract with an in-house Thomas Cook tour operator that included flights would also receive a refund because Thomas Cook Tour Operations was required under Air Travel Organisers' Licensing (ATOL) regulations to provide a £1 levy per passenger to the Civil Aviation Authority (CAA), and the customer would be able to claim a refund under the ATOL scheme.  Thomas Cook added that they provided the maximum amount of retail bond to ABTA, which covered all types of business that did not fall under either their ATOL bond with the CAA or their non-air package bond with ABTA.  Therefore, even if they ceased trading, in circumstances where they were both the travel agent and the tour operator customers would still be able to claim a refund under Thomas Cook's retail bond with ABTA.  They said only in circumstances where the tour operator still existed or traded would ABTA refuse to refund the customer, because they would expect the tour operator to honour the booking.  They pointed out that the travel industry was one of the few industries where financial protection and bonding arrangements were in place, and because they themselves had both retail and tour operator bonding, they were better placed than most advertisers to be able to fulfil their promise should they cease to trade.

Clearcast said before they approved the TV ads they had received substantiation regarding the money back guarantee and were satisfied that the claim was accurate and clear.  They endorsed Thomas Cook's comments and were confident that the ads were not misleading, because the money back guarantee would be fulfilled by Thomas Cook should a third-party operator cease to trade and by ATOL should Thomas Cook themselves go into administration; in both instances, a consumer's money would be safe.

2. Thomas Cook believed the ad clearly indicated the promise that a booking could be made without the customer having to worry that they might lose their money, because they would provide a refund in the event of the supplier's collapse.

Clearcast acknowledged that ad (a) might not make clear the nature of the guarantee, and explained that it had been approved in error.  The error was very quickly recognised and the ad ran for only a short period before being replaced by ad (b), where the additional on-screen text, in their opinion, sufficiently qualified the nature of the offer.  

3. Thomas Cook acknowledged that if a customer were to make a claim themselves via the ATOL process, it might well take longer than 24 hours.  They pointed out, however, that they themselves were undertaking to refund the customer rather than the customer having to seek a refund from the CAA under ATOL or from ABTA under a retail bond.  They said the full terms and conditions of the guarantee explained that the 24-hour period commenced from the time Thomas Cook received all necessary documentation.  Part of the documentation required was an assignment form under which the consumer would assign any claim they might have against any bond or other form of protection in place for the travel supplier that had ceased to trade.  By obtaining that assignment, Thomas Cook would be able to make a refund to the consumer within 24 hours and could then progress a claim itself against the travel supplier's bond.  They explained that they had taken a conscious decision to refund their customers in advance of receiving reimbursement themselves from any financial protection scheme.     

Clearcast endorsed Thomas Cook's response and said they were satisfied that the claim was accurate.

Assessment

1. & 4.  Not upheld

The ASA noted the viewers' concern that, because Thomas Cook acted as both travel agent and tour operator for many of the holidays they sold, the guarantee for those holidays could not be fulfilled if the company were to cease trading because there would not be a third party supplier involved.  We also noted, however, for holidays involving air travel, Thomas Cook's in-house tour operator was required under ATOL regulations to pay a CAA levy and consumers would therefore be able to claim a refund.  We noted, furthermore, that other types of holiday sold by Thomas Cook were covered under ABTA's retail bond in circumstances where Thomas Cook was both the travel agent and the tour operator.  Because customers would be able to get their money back in all of those circumstances, we concluded that the ads were not misleading.

On this point, we investigated the TV ads under CAP (Broadcast) TV Advertising Standards Code rules 5.1.1, 5.1.2, 5.1.3 (Misleading Advertising), 5.2.1 (Evidence), 5.2.3 (Qualifications) and 5.2.5 (Guarantees), and the press ad under CAP Code clauses 3.1 (Substantiation), 7.1, 7.2 (Truthfulness) and 17.1 (Guarantees), but did not find them in breach.

2. Upheld

We noted ad (a) appeared in error and was replaced with ad (b) after it had run for a short period.  We were concerned, however, that ad (a) did not make clear that the guarantee applied only in the event of companies ceasing to trade.  We concluded that ad (a) was likely to mislead viewers about the nature of the guarantee.

On this point, the ad breached CAP (Broadcast) TV Advertising Standards Code rules 5.1.1, 5.1.2, 5.1.3 (Misleading Advertising), 5.2.3 (Qualifications) and 5.2.5 (Guarantees)

3. Not upheld

We noted Thomas Cook undertook to refund the customer themselves if a third-party supplier were to go into administration and that they would do so within 24 hours of receiving the necessary documentation from the customer.  We understood that if Thomas Cook itself ceased to trade and there was no third-party supplier, consumers who had a contract with an in-house Thomas Cook tour operator, which included flights, would be covered under ATOL regulations and would therefore have to apply to the CAA for a refund themselves. We understood that ATOL did not guarantee a refund would be given within a certain time limit.  However, we considered that consumers were likely to understand that the guarantee to refund within 24 hours applied only to those instances when third parties ceased to trade; they would not expect to get a refund in 24 hours from Thomas Cook if they themselves ceased to trade. Because Thomas Cook refunded customers within 24 hours if a third party ceased to trade, and because customers were unlikely to think the guarantee to refund within 24 hours applied if Thomas Cook ceased to trade, we concluded that the ads were not misleading.

On this point, we investigated the TV ads under CAP (Broadcast) TV Advertising Standards Code rules 5.1.1, 5.1.2, 5.1.3 (Misleading Advertising), 5.2.1 (Evidence), 5.2.3 (Qualifications) and 5.2.5 (Guarantees) and the press ad under 3.1 (Substantiation), 7.1, 7.2 (Truthfulness) and 17.1 (Guarantees) but did not find them in breach.

Action

On points 1, 3 and 4, no further action was necessary.

On point 2, we welcomed Clearcasts assurance that ad (a) was no longer appearing.

Adjudication of the ASA Council (Broadcast)

Adjudication of the ASA Council (Non-broadcast)