Thomas Cook: The latest on flights and hotels

A Thomas Cook help update, urgent mis-sold payday loan reclaims, top student bank accounts and £10 off each £50 spend on Smyths toys. These are our Money Saving Expert Martin Lewis’ Tips of the Week.

Remember, tips can change quickly, even while I’m on the programme. So always double-check the terms and conditions before spending. Plus, while I hope these deals will save you cash, don’t spend if you can’t afford it, don’t need it, or won’t use it.

Thomas Cook update

After the giant firm went under on Monday, there’s been lots going on, so I wanted to do an update. I’m picking out 3 core issues, though there’s a full Q&A on a range of issues in Martin’s Thomas Cook detailed help.

- Some are being asked to pay again for hotels. If you’re already abroad on an ATOL-protected package holiday, the CAA says it’ll try to ensure you can stay at your current hotel – but some hotels may ask you to pay or even leave.

This is because hotels are usually paid by Thomas Cook after your stay, so they haven’t had their money yet and are worried. The CAA will cover the costs after Monday when Thomas Cook went into administration. Yet if you were staying in your hotel before the Monday when Thomas Cook went bust, the hotel is supposed to claim money owed from the administrators rather than the ATOL scheme – which means they won’t likely get much back.

Technically this isn’t your problem, it’s the hotel’s, as it agreed a contract with Thomas Cook. But unfortunately those running the hotels may take a different attitude, and ultimately the most important thing is to stay safe.

So if you’re being pushed to pay again, first try and call the CAA, and get the British Embassy involved if possible. But if you feel unsafe, pay now and keep receipts and proof of payment to try and claim the full amount from ATOL CAA later.

- Those with flight-only bookings are starting to get money back. While those who’d booked Thomas Cook package holidays with flights are covered by the ATOL scheme and will get a full refund in due course, those with flight-only bookings are having to try other methods to get their cashback.

But luckily, we’re already seeing stories of people who paid by debit card getting refunds from their banks via the chargeback scheme – like Dan, who was refunded £200 for Thomas Cook flights booked with his Barclays debit card. He said: “The conversation took five minutes…I got a notification less than an hour later to say the full amount had gone back in.”

- Direct debits should have stopped and ATOL-protected customers will be refunded. Many have been asking should they cancel their direct debits. Yet any direct debits which were due to go out from 25 September onwards will have been automatically cancelled as Thomas Cook is no longer a going concern. And though Thomas Cook’s collapse isn’t covered by the Direct Debit Guarantee, those who were paying for ATOL-protected holidays by direct debit will be refunded anything they’ve already be paid.

Had a payday loan? URGENTLY check if you were mis-sold – time’s running out for Wonga claims

Payday loans are a flawed concept – they’re often far too easy to get and many borrowers have been stung by lenders’ decisions, ending up struggling to pay off their debts and running up hideous amounts of interest.

At the time of taking the loan, lenders must examine your finances to ensure you can afford the loan and fees. But if, as was common, that wasn't done properly and you shouldn't have been lent the cash – or the costs or the repayment timetable weren't clear – you were mis-sold, even if the loan is now paid off.

If you were mis-sold, you can reclaim. There’s a free tool in Martin’s payday loan reclaiming guide. You’ll be due back all the interest, fees and charges and 8% per year on top since you took it out, which can be £100s or even £1,000s - like Paul who emailed: “I was paid back £3,800 from two lenders. It was all sorted in six weeks – many thanks.” But if your lender has gone bust (like Wage Day Advance and Juo Loans, which went into administration in February), you’ll be one of the creditors and won’t get the full amount you’re owed.

Yet specifically for customers of payday giant Wonga, which collapsed last year, there’s a special compensation route - but it has a deadline of this Monday (30 September). You need to apply for Wonga compensation via a website set up by administrators Grant Thornton – all you need to do is put in your details, and Grant Thornton will assess whether you’re owed money (so you don’t need to explain why you were mis-sold). If you’re unsuccessful you can escalate your complaint with Grant Thornton but can’t go to the ombudsman, as bust payday lenders aren’t in its remit.

Sadly though it’s possible you’ll only get a few pennies in the pound of any money you were owed, depending on how much the administrators have recouped.

Martin’s quickies:

Top student bank accounts: Students are now starting or going back to uni, and high street banks are salivating at the thought of gaining these potentially high-earning customers for life. They’re flinging out student bank accounts with perks and freebies (don’t be loyal though, ditch and switch once the offer isn’t good).

Probably the top pick is HSBC, which gives new students (and apprentices) a free £100 if you apply by 31 December 2019. Plus you’ll get a guaranteed £1,000 0% overdraft in year one, and the (non-guaranteed) option to increase it to up to £2,000 in year two and up to £3,000 in year three.

For a guaranteed larger 0% overdraft, the Nationwide BS FlexStudent account for new students offers £1,000 in year one, £2,000 in year two and £3,000 in year three. Alternatively, Santander 123 student account gives a free four-year 16-25 Railcard, which gives a third off rail travel, worth about £90, and a decent up to £1,500 0% overdraft for three years. You can also open it if you’re not in the first year of your course, and you’ll get 3% interest on in-credit balances of up to £2,000.

To open a student account you’ll need to show the bank proof of your place at university – either through a letter from UCAS or your uni. You’ll also need to meet the minimum criteria to get the freebies – with Santander that’s paying in £500/term, plus registering for online banking. If you’re an existing student you can switch student bank accounts, though some will only let first-year students open the accounts.

Smyths £10 off each £50 spend: If you’re buying kids’ toys, Smyths is offering £10 off almost everything when you spend £50 in-store until Sunday 29 September. The offer’s not valid online, so you’ll need to go in-store to get it – the discount will be applied automatically at checkout. Unfortunately, video games, consoles and gaming accessories are excluded.

The offer’s for £10 off each £50 spend, so if you’re spending £100 you’ll get £20 off and so on – Smyths says there’s no upper limit. We usually see this offer once or twice a year, so could be good if you have a child’s birthday coming up or you’re putting gifts away for Christmas. Smyths prices can be competitive on some things, but of course it’s always worth checking prices elsewhere too.