British holidaymakers with ‘Refund Credit Note’ vouchers are being urged to use them before they lose financial protection.

According to the Civil Aviation Authority (CAA), there is over £130 million worth of unused credit vouchers for holidays that were cancelled during the pandemic. Brits are now being urged to either use the vouchers towards a new holiday or exchange them for a cash refund before September 30, or risk losing their money.

Usually, when a package holiday is cancelled, the tour operator is legally obligated to refund passengers within 14 days of the cancellation. However, last March, after the coronavirus pandemic paused all international travel, many travel firms offered customers whose trips had been cancelled a ‘Refund Credit Note’ (RCN) as an alternative to a cash refund and way of reducing the financial impact on the firms’ finances.

Many customers accepted RCN’s as it offered an easy way to rebook a holiday or request cash back at a later date. It also provided peace of mind that customer’s finances were protected if the firm that they had booked their trip with was to go bust.

However, from December 20, 2021, travel firms will no longer be able to offer Atol-protected RCNs for cancelled holidays. Additionally, the financial protection of existing vouchers will end on September 30, 2022. This means that from December 20, 2021, travel firms will only offer customers a refund if their trip is cancelled. Also, anyone who accepts a voucher in instead of a cash refund will not have the financial protection that the RCN once offered.

Anyone who has a RCN must use it before it’s expiry date as not all travel insurance providers will accept claims for unused vouchers. Whether travellers can claim for unused vouchers through their insurance or not will depend on the provider and their terms and conditions. Where cover is available, travellers may be asked to show proof from their tour operator that the vouchers have not, and cannot, be used. Also, some insurers may only review claims for unused vouchers if there is a specific reason as to why the vouchers cannot be used within the validity period. For example, this could be where a customer has received a new medical diagnosis and cannot travel abroad before the voucher is due to expire.

Also, it’s worth being aware that anyone looking to use their RCN’s to rebook a holiday should check whether they still have travel insurance in place to protect their trip. Travellers who have an annual or multi-trip policy should continue to be covered for any trips until their policy expires. However, once the policy has expired, protection will no longer be in place. This means that should a re-booked trip date place after the policy expiration date, travellers will need to buy a new policy to make sure they are fully protected.