Travel companies face legal action

The UK's Office of Fair Trading has warned that it will take legal action against four major travel operators to find out information about their holiday cancellation charges. Thomson Holidays, Airtours, JMC Holidays and First Choice have all refused to provide information about their charges, thereby failing to co-operate with an investigation by the OFT into the issue.

The four companies have been given 14 days to provide the information. Failure to do so will result in legal action, the OFT said in a statement. "There are serious questions about the cancellation charges for package holidays sold in the UK," said the director general of fair trading, John Vicker. "We are determined to get the relevant information and will take court action if necessary," he added.

Unfair charges

The OFT is investigating whether cancellation charges on package holidays are unfair. It has asked the companies to explain the financial basis on which such charges are calculated. If a holiday is cancelled between 22 and 56 days before departure, travel operators typically charge 50% of the holiday's cost. This increases to 100% if the holiday is cancelled within seven days of departure.

'Rip-off Britain'

Charges by UK travel operators often exceed those in other countries, including Sweden. There, a cancellation - even if it is within 24 hours - usually results in only a 50% charge. This difference with some European countries is one of several reasons consumer groups and some politicians have dubbed the UK "rip-off Britain". Thomson is owned by Europe's largest travel group Preussag, while JMC is the tour operating arm of Thomas Cook.