Etusivu \ Consumer Issues \ Supervision of package travel companies

Supervision of package travel companies

The Finnish Competition and Consumer Authority is tasked with securing the claims of travel buyers in the event a travel agency goes bankrupt. For this reason, package travel companies must deposit a security specified by the FCCA if they collect advance payments from their customers.

There were six bankruptcy cases in 2017. In four of them, the business operations had ended in practice, and no consumers had receivables. In two other cases, there were only a few compensation claims, which were adequately met by the securities.

KKV Valmismatkaliikevalvonta

A supervisory campaign was carried out during to year, targeting coach companies exempted from a security. The Regional State Administrative Agencies carried out inspections in companies in order to review practices for collecting payments. The companies were advised to acquire securities if they collected advance payments.


In the spring, the report by the working group of the Ministry of Employment and the Economy on the reform of the security system and the report of the working group of the Ministry of Justice on the reform of the Act on Travel Service Combinations were completed. Both are based on the updated EU Package Travel Directive. Three laws were enacted in the autumn: the Act on Travel Service Combinations (Laki matkapalveluyhdistelmistä) (901/2017), the Act on Travel Service Combination Providers (Laki matkapalveluyhdistelmien tarjoajista) (921/2017), and the Act on the Supervisory and Insolvency Protection Fee Provided by Providers of Travel Service Combinations (Laki matkapalveluyhdistelmien tarjoajan valvonta- ja maksukyvyttömyyssuojamaksusta) (922/2017).

The reform will extend the scope of supervision to all companies offering travel services in combination so that customers can purchase services at a combined price for the same trip. On the other hand, the administrative burden will ease, as only the travel sector operators that collect advance payments from customers or arrange transport will need to register. An estimated 300 companies that do not collect advance payments will be removed from the FCCA register.

Supervision fees will become fees comparable to a tax, divided into supervision and insolvency protection fees. Due to the requirements of the insolvency protection system, an appropriation that can be used for arranging return transport and rapid reimbursements for passengers has been introduced to the state budget. The appropriation will also ensure full compensation in the event that the collateral turns out to be insufficient. For this service, the state will charge travel industry companies an insolvency protection fee.

In the future, travellers will be able to have their money returned nearly instantly in the event of organiser insolvency, letting them buy a new trip. This will benefit the industry by making money circulate more quickly.

The legislative changes will come into effect on 1 July 2018. The change already raised a great deal of interest and questions in the autumn of 2017. The FCCA presented the reform at travel industry events and produced material to explain the new provisions and supervision to stakeholders.

Register status

  31 Dec 2013 31 Dec 2014 31 Dec 2015 31 Dec 2016 31 Dec 2017
Registered companies 721 738 726 752 757
Of which are brokers 37 43 40 38 43
Depositors of securities 450 440 450 469 469
Total amount of securities approx. EUR 250 M approx. EUR 230 M approx. EUR 210 M approx. EUR 241 M approx. EUR 210 M

 

Basic operations

  2013 2014 2015 2016 2017
New companies 68 73 52 58 53
Removed from the register 68 56 60 35 53
Supervisory actions 575 522 516 359* 423
Bankruptcies 2 7 2 3 6
Decisions on compensations 6 1949 2 0 4

*) The 1Q data is missing from this figure due to a system changeover.

Indicators monitored

  Goal 2013 2014 2015 2016 2017
Processing time of registration applications, 7 days 7 2,4 2,4 3,0 0,8 2,5
Sufficiency of securities in the event of bankruptcy, 100% 100 100 100 100 100 100