Holidays under threat as Freedom Direct travel firm collapses

Apr 17 2009 by Andrew Mernin, The Journal

:: Have you been affected by the collapse of Freedom Direct Holidays? Then we want to hear from you. E-mail us here or call 0191 201 6446.

ONE of the region’s biggest holiday companies is to be wound up and its 109 staff axed after its auditors stopped it from taking any more money.

Newcastle-based Freedom Direct Holidays ceased trading yesterday, leaving thousands of customers who had booked with the company worried about their holiday plans.

The liquidators, Newcastle accountancy firm RMT, stepped in to reassure customers that no-one would lose their money, but warned that tours directly operated by Freedom Direct would probably be cancelled, leaving travellers to apply for a refund.

The £70m turnover company, which had operated successfully for 12 years, had to be wound up after it appointed new auditors who found they could not satisfactorily complete Freedom’s accounts on time.

RMT said that inconsistencies in the way its finances had been recorded on two different computer systems meant the auditors could not find the detail they needed, but there was no implication Freedom had made a mistake or misled anyone.

Around 2,600 bookings will be affected, many of those for several people, but RMT is looking at options including selling on the tours booked with Freedom to other travel agencies, which would mean customers could go on holiday as planned.

Mike Potts of RMT said: "It is a tragic situation. I have not come across this type of thing before.

"Freedom Direct had traded perfectly well, apart from a slight dip this year as experienced by all operators in the current climate.

"There had been no problems with their accounting before, but this time they were deemed to be not good enough."

Freedom had to stop taking money on April 1 because its annual accounts were not submitted in time for it to renew its ATOL (Air Travel Organisers’ Licence). This meant that the Civil Aviation Authority had to withdraw the bond which allows Freedom to trade.

The company then suffered cash-flow problems.

The company, which operates the websites freedomdirect.co.uk, freedom-direct.co.uk, snowdeals.co.uk and holidaysyoulike.co.uk, put up a statement explaining the situation on its website yesterday evening.

A company statement said: "A meeting of directors was held today at which the directors took the regrettable decision that the company could not continue to trade.

"A number of options to attempt to save all or part of the business had been explored, including alternative licensing options and the transfer of the business to another ATOL licence holder."

:: Have you been affected by the collapse of Freedom Direct Holidays? Then we want to hear from you. E-mail us here or call 0191 201 6446.