It is already known people who booked holidays with bankrupt Lowcostholidays will not get back more than £7.15 from its administrators. The only way they recover some of the payments is applying to their credit or debit card issuers. Hopefully this case will work for future holidaymakers as an example of how important it is to obtain proper travel insurance and pay in the right way - by credit cards.
Around 27,000 of their customers were in resorts while 110,000 were suppose to travel. Most were planning holidays in the sun, due to a time of a year.
Some of those in resorts were asked by hotel suppliers, transfer suppliers or even car parking suppliers to pay them locally. People waiting for their holidays could have their flight tickets paid but rather not accommodation. Some of them decided to search for new hotels and use the travel arrangements already paid.
Anyway, everybody wanted to recover what they lost. The problem is the company moved to the Balearics in 2013 and was not an ATOL protected company, so Brits were not insured against its bankruptcy.
The administrators issued an advice to Lowcostholidays clients advising them to apply to their cards providers or travel insurance providers. And some made successful chargeback claims from their bank after paying for the holiday even with debit cards. But many still await for something to be paid by administrators.
Unfortunately they cannot count on any serious payments. It has been revealed by administrators Smith & Williamson they will only be able able to refund customers around £7.14 each... The Spanish subsidiary, Lowcostholidays Spain SL, had a bond of just £1.1 million with the authorities in Mallorca which would provide just 1 or 2% compensation – equivalent to £7.14 per customer.
According to administrators report the total estimated shortfall from the group runs into "tens of millions of pounds". Exact figure is still to be calculated. However in the meantime it had become clear that when Lowcost Travel ceased trading it owed an estimated £75 million with less than £10 million in assets.
"We have spoken to some of Lowcostholidays' customers. Many of them simply even didn't consider taking any special travel insurance. Others do not understand how important is that their holiday provider is a member of ATOL and ABTA. And there are still some who don't know if they have any travel insurance on their credit cards." - says spokesman for Best Sun Holidays, online service which cooperates with DIY holidays companies.