Thomas Cook has said it is taking legal action against Lowcostholidays.com after it used the phrase 'been Thomas Crooked?' in its search engine advertising.
The dynamic packaging firm has bid against search terms including 'Thomas Cook' and 'Thomas Cook holidays' using the controversial headline. The link appears second on the list of pay-per-click results on Google.
The move has prompted an investigation from trade association Abta after it received a complaint.
Cook is claiming that the firm has breached Abta's code of conduct, which states that no member should make comments about another member's financial status. The code also stipulates that no member should denigrate another or bring them into disrepute.
Ian Ailles, chief executive of mainstream for Thomas Cook UK said: "It is shocking the tactics some will stoop to. This is totally unacceptable and defamatory and we're taking immediate legal action against them.
“Lots of our trade partners are working with us. It shows the childishness of this organisation. It’s almost unforgiveable.”
Speaking before Cook confirmed this morning that it was consulting its lawyers, Lowcostholidays chief executive Paul Evans said the wording was meant to be light-hearted, but added: "This is clearly a very worrying time for all the staff and we wish them well. There is a lack of confidence in the brand and the company now.
"The question now is whether they will be able to build confidence for summer 2012."
Evans said the media had focused too heavily on the UK perspective. "You can't take a UK perspective - it's not a UK play it's a German, Scandinavian and French play. Ving - Cook's Scandinavian tour operator - makes up £100 million of their profits. The question is whether the retail trade in Scandinavia will continue to book it."
An Abta spokesperson said : “We have received a complaint about a Lowcost Holidays advert on Google which the Abta legal department is investigating for potential breaches of the Code of Conduct.”