Abstract
An Online Travel Agency (OTA) in Europe, Lowcost Travel Group, has ceased all operations. This bankruptcy had a significant impact on travelers, particularly to holiday-makers in the United Kingdom market. The company, established in the UK in 2004, moved its head office to Palma de Mallorca, Spain. At the time of the bankruptcy and resulting closure, Lowcost Travel Group had 27,000 customers with 110,000 future booking arrangements through the company. Under UK legal framework, because the company established a head office outside UK borders, customers of Lowcost Travel Group were no longer protected under UK consumer protection regulations. This collapse is a good example of bankruptcy by a travel agency under borderless circumstances. From the customer's perspective, the ‘charge-back' procedure offered by credit card companies could be one substantial method to recover lost money. This paper examines the limitations of the current regulatory framework in terms of consumer protection, and indicates the implications these may have on Japan's regulatory design in order to meet the current travel industry globalization trend.
