UK holiday fraudsters could face jail

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UK holidaymakers who make bogus food poisoning claims could go to prison, warns travel trade organisation Abta.

A huge rise in false claims has left travel bosses “embarrassed” by a trend which they say is a “British problem”.

Abta chief executive Mark Tanzer said the fraud is “one of the biggest issues that has hit the travel industry for many years”.

He added that tourists chasing false or exaggerated claims “risk ending up in jail either in the UK or abroad”.

Tens of thousands of UK tourists have put in for compensation in the past year, even though sickness levels in resorts have remained stable.

Clampdown call

Abta says the cases usually involve holidaymakers who have been abroad on all-inclusive deals, who argue that because they only ate in their hotel, that must have been the source of their alleged food poisoning.

It has launched a campaign called Stop Sickness Scams, asking the government to clamp down on the issue.

It says laws designed to stop fraudulent claims for whiplash have instead pushed the problem of false insurance submissions on to overseas holidays instead.

This is because of a cap on the legal fees that can be charged by law firms pursuing personal injury cases at home.

Mr Tanzer added: “The government must urgently address this issue. The legal loophole that is allowing firms to unduly profit from these claims must be closed.

“This would allow people with genuine claims access to justice but make this area less attractive to claims firms.”

Travel firm Tui said it had experienced a 15-fold rise in holiday sickness claims in the past year, costing between £3,000 and £5,000 a time, which was often more than the value of the holiday itself.

Tui’s UK managing director Nick Longman and Thomas Cook UK’s managing director Chris Mottershead both warned that if the problem continued, it could spell the end of the all-inclusive holiday for UK travellers.

Mr Mottershead said: “It has the potential of putting hoteliers out of business. They will stop British customers coming into their hotels.”


Joel Brandon-Bravo, managing director of Travelzoo UK, told BBC Radio 5 live’s Wake Up To Money that the upward trend was being driven by claims management companies.

“People are being called when they get back from holiday and encouraged to make claims and we’ve also seen evidence of them employing touts outside resorts encouraging people to make a claim and walking them through the process to make it easy for them,” he said.

Mr Brandon-Bravo added that he felt people who were trying to cheat the system were not aware of the consequences if they were caught.

“Generally it is not made clear that if a claim is found to be fraudulent the individual could have a criminal record.

“In fact, there is one case going through right now with a Greek hotel, who is counter-suing a couple who made a claim for sickness three years ago for £10,000 and the hotel is counter-suing them for £170,000.

“They tried to withdraw their claim but they are seriously worried they could lose their house.”

The Foreign Office has also advised tourists against making any fraudulent claims.

“If you make a false or fraudulent claim, you may face legal proceedings in the UK or Spain,” the FCO warns.

“There have been reports of an increase in holidaymakers being encouraged to submit a claim for personal injury if they have experienced gastric illness during their stay,” says the FCO website.

“You should only consider pursuing a complaint or claim if you have genuinely suffered from injury or illness.”

The Alliance of Claims Companies told the BBC it was hoping to establish industry best practice principles that would help drive out rogue companies.

It wants to work with the travel industry to ensure genuine claims are dealt with effectively.

Bosses at collapsed Swan Hellenic cruise firm paid themselves nearly £1m

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Bosses at now-collapsed cruise firm All Leisure Group paid themselves almost £1m in 2015, despite the struggling owner of the Swan Hellenic brand posting profits of less than £550,000 in the same period.

About 400 holidaymakers have been left in chaos abroad after the troubled business, which counted former P&O chairman Lord Sterling as its second-biggest shareholder, ceased trading on Wednesday. Grant Thornton has been appointed administrator to the Market Harborough-based firm, which operated the Minerva vessel under the Swan Hellenic brand name and Voyager under the Voyages of Discovery brand. Both operations, which employed 150 staff, have been shut down. However, its Hebridean Island Cruises subsidiary, the operator of the luxury Hebridean Princess ship that was twice chartered by the Queen for holidays, has been kept afloat after Roger Allard, All Leisure’s chairman and majority shareholder, orchestrated a deal to sell the business to a group of investors last month. Mr Allard has been installed as the chairman of the Hebridean Princess’ new owner.

Meanwhile, All Leisure’s profitable tour holiday brands, Travelsphere and Just You, have been sold by Grant Thornton to Canadian business G Adventures, saving 200 jobs and protecting the bookings and holidays of more than 13,500 passengers. “The cruise operations have been significantly loss making over a number of years and the ongoing cost of funding by the tours operations has created significant cash issues for the entire group,” said Eddie Williams, of Grant Thornton. According to All Leisure’s last set of accounts for the year to the end of October 2015, its cruise division suffered an annual operating loss of £2.6m on revenues of £61.1m. Thanks to its profitable tours business and a tax credit, it generated an overall net profit of £543,000.

At the same time, however, seven members of its management team and non-executive directors paid themselves a total of £920,000. Mr Allard alone was paid £301,000 and chief executive Ian Smith received £313,000. The company’s two main cruise brands focused on historical and cultural destinations in the eastern Mediterranean, Black Sea and North Africa. However, demand to travel to those regions has been hit by the rise of terrorism and geo-political turmoil. Like other travel companies, All Leisure was more recently rattled by the vote to leave the EU in June, which sent the pound tumbling and piled further pressure on the firm. Mr Allard told Travel Trade Gazette: “Trading for these two brands has been tough since the Arab Spring. While we poured more money into the business, you can’t change geopolitical events. “As well as that, a lot of the costs of operating ships are in dollars and euros, which has been a struggle since the Brexit vote.”

All Leisure was listed on London’s junior Aim market until June, when it to cut costs. At the time Lord Sterling, who was in favour of Brexit, owned about 6pc of the company. The Civil Aviation Authority said the “vast majority” of All Leisure’s 400 customers abroad will be able to use their scheduled plane tickets to get home, although it added that it “has made arrangements to bring the small number of remaining passengers back to the UK at no extra cost”. Travel association Abta said the firm had taken about 13,000 future bookings that have been cancelled. About a third where for UK departing cruises and so are financially protected by Abta, while those booked with flights will be covered by Atol.



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