In case of insolvency, a travel service combination provider must lodge a security when it charges passengers, either in part or full, for the price of a journey before the start of the trip. The provider of the travel service combination is responsible for ensuring that the security it provides is sufficient at any given time.
A travel service combination provider which charges advance payments from passengers for travel packages or linked travel arrangements, must lodge a security to enable the refund of payments for agreed services that are not provided in the event of insolvency. If the agreement includes carriage of passengers, the security must also cover repatriation of travellers.
The security shall be used only for the payment of secured claims to travellers and, where required, repatriation of travellers. The traveller cannot, therefore, claim from the security, e.g. regarding a price reduction or a claim for damages, if the provider of the travel service combination is not declared bankrupt or is not declared insolvent by a decision of the Finnish Competition and Consumer Authority. However, in the event of insolvency, the passenger has the right to recover the money they have paid, even if the services provided by subcontractors as part of the travel package have been paid. This right applies to the entire travel package contract and also, for example, to air tickets or hotel vouchers already in a customer's possession.
The amount of the security must be sufficient, at all times, to compensate for the above refunds in the event of the insolvency of the travel service combination provider. In the event of and interrupted trip, the consumer will be paid compensation equivalent to the portion of the trip that was interrupted. Advance payments collected by a service combination provider shall at no time exceed the amount of the security.
The security is based on the aggregate amount of advance payments collected before travel commences. Pre-paid fees include both booking fees and the final payments made before departure, as well as unredeemed gift vouchers entitling the holder to the purchase of travel service combinations. A large booking fee and long payment terms raise the amount of guarantee required. The monthly sales figures used as the basis for calculation (booked sales) must always be expressed in gross amounts and reflect the total value of the journey, even if part of the price is paid after the journey.
If the combination includes transport, a security covering possible repatriation of travellers must also be added. However, the repatriation obligation does not apply to connecting transport, such as a shuttle bus from an airport to accommodation.
Moreover, no security is required for journeys falling outside the scope of the Act and purchased on the basis of a general agreement for the arrangement of business travel. The general agreement referred to in this provision is an agreement concluded between a trader and a corporate customer acting for purposes related to their business, trade, craft or profession. Such an agreement is generally concluded with the travel organiser for an indefinite or certain period and concerns several journeys made as part of the business or other organisation's activities.