Tour operator bankruptcy drives consumers to crowdfunding

22 July 2016

After the breakup of infamous Lowcostholidays may households were forced to resort to crowdfunding services online to get some cash from their acquaintances as they were left without means of subsistence at least for return to their homes. The company became bankrupt and was taken by the court appointed administrator a week ago leaving about 140 000 consumers cashless.

55% of the tour operator clients were from the UK. 27 000 travelers were left abroad while others have lost their bookings.

One user of a crowdfunding website notes that her sister lost all her honeymoon savings because of unfortunate booking with the bankrupt operator. Another affected consumer says that she suffered from Lowcostholidays leaving her children without the trip promised to them since the Christmas Eve while the family has no other money saved for bad days.

This week the administrator announced that people could recover 7.78 pounds each as a compensation. The company, incorporated in Palma, Mallorca did not join any protection schemes.

Abta recommends all consumers to verify their bookings with the hotels and airline operators.

Bankruptcy of the tour operator brought 120 phone applications within one day to the call center of Holiday Travel Watch, a consumer group. Director of the consumer department underlines that responsibility should rest on the government to resolve the issue of recovering money and to provide some service for helping affected families.

Today crowdfunding is a popular way of getting additional financing through collective efforts of a large number of participants. Crowdfunding helped raise about 5.1 billion US dollars in 2013, 16 billion in 2014 and 34 billion in 2015.

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