Deposits and balances

The Package Travel Regulations 2018 do not set a maximum deposit or a latest date for the balance. What they control is what the customer is told, and when:

• Before booking, the customer must be told the total price, including taxes and all additional fees. They must also be told the payment arrangements, including any deposit and the timetable for paying the balance.

• That information becomes part of the contract and cannot be changed unless the customer expressly agrees. A customer does not have to pay fees, charges or other costs they were not told about before booking.

• Failing to give the pre-contract information is a criminal offence. When a package is sold through a retailer, both the organiser and the retailer commit it.

Changing the price after booking

You can increase the price of a package after booking, known in the trade as a surcharge, only if the contract allows it, and only because of changes in:

• the cost of fuel or other power sources used to carry passengers

• taxes or fees on the travel services charged by third parties not directly involved in performing the package, such as tourist taxes, landing taxes and embarkation or disembarkation fees at ports and airports

• exchange rates relevant to the package

The contract must also give the customer the right to a price reduction for the same reasons and must say how any change will be calculated. You must tell the customer about any increase on a durable medium, with an explanation and a calculation, no later than 20 days before the package starts. If the increase is more than 8% of the total price, the customer can cancel without paying a termination fee.

Cancellations and refunds

• When the customer cancels. A customer can cancel a package at any time before it starts but may have to pay an appropriate and justifiable termination fee. Your contract can set reasonable standard fees, based on how close to departure the cancellation is and the savings and resale income you would expect.

• Unavoidable and extraordinary circumstances. If circumstances at or near the destination significantly affect the package, or getting there, the customer can cancel without a fee and receive a full refund.

• Refund deadline. Refunds after a cancellation must be made without undue delay and within 14 days of the contract ending.

For packages booked on or after 6 April 2027, a supplier that cancels or fails to provide a service in a package will have to refund what the organiser paid it within 14 days. The same changes mean that two or more different types of travel service for the same trip, such as a flight and a hotel, will form a package if a customer chooses and pays for them separately in a single visit to or contact with one business. Our Package Travel Regulations guide explains the rules in full.

Taking payment for flights: the ATOL rules

If you sell flights or flight-inclusive packages that need ATOL protection, the ATOL rules decide how you handle payments:

• Certificates on first payment. An ATOL Certificate must be issued as soon as you accept a first payment, whether a deposit or the full price. The CAA treats taking card details or a cheque as taking payment, even before it is processed, so you must not take any payment until you can issue the certificate.

• Money held for the Trustees. If you sell as an agent for an ATOL holder, money customers pay you for the ATOL holder’s services is held for the Trustees of the Air Travel Trust. While the ATOL holder is trading you pass it on, but if it fails you must keep holding the money for the Trustees and must not pay it to the failed company.

• Receipts. Receipts must show which money is ATOL protected and which is not, so any booking fee you charge must be shown separately. The Air Travel Trust does not refund an agent’s identifiable mark-up or booking fee.

• Credit card payers. Under its payment policy, the Air Travel Trust may refuse to pay a customer who paid by credit card and ask them to claim from their card issuer instead. The CAA says it does this only for bookings made directly with an ATOL holder, not those made through a travel agent.

Our ATOL guide covers the wider rules.

Protecting customers’ money for packages without flights

If you organise packages without flights, you must protect the money customers pay you against your own insolvency, using at least one of:

• a bond with an approved body

• insurance

• a trust account, run by an independent trustee, which holds customers’ money until the package has been performed, the money has been refunded or it has been forfeited on cancellation. If your packages include transport, you also need insurance to cover bringing customers home.

Supplier failure insurance, which covers the collapse of a supplier such as an airline or hotel, does not replace this duty to protect customers against your own insolvency.

Card surcharges and booking fees

• No surcharges on consumer cards. Since 13 January 2018, you have not been allowed to charge a fee for payment by a consumer debit or credit card, or by other consumer payment methods such as PayPal.

• Commercial cards. The ban depends on the type of card, not the type of customer. Commercial cards issued to businesses can be surcharged, but never by more than it costs you to accept them. ABTA members that charge for corporate cards must state what the charge is, clearly and prominently, in their brochures, website, advertising and shops.

• Cards issued abroad. Under the regulations, the outright ban applies only when both the customer’s and your payment providers are in the UK. If only one is, such as with a consumer card issued outside the UK, the fee must still not exceed your cost. Card scheme rules and your agreement with your acquirer also apply, and ABTA’s guidance treats all charges on personal cards as banned for its members, so check before applying any fee.

• Booking fees. A booking or service fee that every customer pays, whatever the payment method, is not a surcharge. But since 6 April 2025, under the Digital Markets, Competition and Consumers Act 2024, it must be included in the headline price. The Competition and Markets Authority’s guidance says this covers booking, administration and processing fees however they are described, including in a “from” price.

Section 75 and chargebacks

Section 75. When a customer pays by credit card for an item with a cash price of more than £100 and up to £30,000, the card issuer is equally liable with the supplier for a misrepresentation or breach of contract. The test is the cash price of the item, not the amount put on the card, so paying just the deposit by credit card can bring the whole claim within Section 75. It does not cover debit cards, charge cards, bank transfers or cash. A card issuer that pays a claim can recover its loss from the supplier.

Whether Section 75 covers a customer who paid a travel agent rather than the supplier is uncertain. The High Court ruled in 2022 that the link can be broken when someone other than the supplier is paid, and Financial Ombudsman Service decisions on travel bookings have gone both ways. If you organise a package, you are responsible for every service in it, so a claim through the customer’s card issuer may extend to failures by your suppliers. Since 15 July 2026, Section 75 has also applied to regulated buy now pay later agreements from third-party lenders.

Chargebacks. A chargeback is a card scheme process, not a legal right. The customer’s card issuer reclaims the money from you through the scheme, and it works for debit and credit cards, but only for the amount paid on the card. Disputes usually have to be raised within about 120 days, often counted from the date the travel was due rather than the date of payment, and Visa’s rules set an outer limit of 540 days after the transaction was processed. Visa also has rules for travel: for travel agencies and tour operators, an issuer must normally wait 30 days after a service is cancelled before raising a dispute that it was not provided. In Visa’s Europe Region, when an insolvent travel company’s services are covered by a bonding or insurance scheme, the customer must normally try that scheme first.

Under card scheme rules, your acquirer bears chargebacks it cannot recover from you, so it may see a business that takes payment months before travel as a higher risk and ask for security or change its terms. Visa’s rules require you to get the customer’s express agreement to your terms, including your cancellation and refund policy, before you take an advance or part payment or store their card for later payments.

Keeping card payments secure

• PCI DSS. Every business that takes card payments must meet the card industry’s data security standard, PCI DSS. It is an industry standard rather than law, and your acquirer decides how you show that you comply, usually with a self-assessment questionnaire.

• Use a provider that handles the card details. The simplest questionnaire, SAQ A, is for businesses that outsource all card handling to compliant providers. Since 31 March 2025, a website with an embedded payment form must also be protected from script attacks, which you can meet with confirmation from your compliant payment provider. You still need a written agreement with the provider and should check its compliance each year.

• Email, text and chat. PCI DSS does not ban taking card details this way, but if you do, those systems come within the scope of the standard.

• Card security codes. Never keep a card security code after the payment has been authorised, even to take a balance later.

• Strong Customer Authentication. Most online card payments need Strong Customer Authentication, where the customer’s card issuer checks two separate things, for example approval in their banking app with a fingerprint or passcode. Balance payments you take later from a stored card under the customer’s agreement are outside it, although setting up that agreement online needs authentication. Card payments taken by phone or post are outside it too, although the FCA expects payment firms to have other safeguards against fraud on those channels.

Other ways to pay

• Pay by bank. Open banking payments go straight from the customer’s bank account, usually over Faster Payments. There is no chargeback and Section 75 does not apply. The providers that start these payments must be authorised by the FCA.

• Bank transfer scams. Since 7 October 2024, banks and other payment firms have had to reimburse victims of authorised push payment scams made by Faster Payments or CHAPS, up to £85,000 a claim. The protection covers individuals, micro-enterprises and charities. It does not cover disputes with a genuine business that fails to deliver.

• Buy now pay later. Since 15 July 2026, the FCA has regulated interest-free buy now pay later credit from third-party lenders. A business that offers it at checkout does not need to be authorised for credit broking, but its promotions of the credit must be approved by an FCA-authorised firm, usually the lender.

Foreign currency

• If you offer to convert the payment into the customer’s own currency at the point of sale, you must tell them all the charges and the exchange rate before they pay. Under Visa’s rules, the offer must be optional and not pre-selected.

• Local charges payable abroad, such as resort fees, must be included in the total price you show, either in the foreign currency or converted into pounds. If part of the price is paid locally, your price breakdown should explain any exchange rate used.

• Exchange rate movements are one of the reasons a package price can rise after booking, if your contract allows it, subject to the 20-day notice rule and the customer’s right to cancel if the rise is more than 8%.