Holiday firms face legal action if they fail to pay refunds

Holiday firms face legal action if they fail to pay refunds to millions of customers, warns watchdog

  • Holiday firms have been warned of legal action over a failure to pay refunds
  • They have been trying to fob people off with vouchers or re-book options
  •  Delays in refunds have added to the misery of people who have lost holidays

Holiday firms have been warned of legal action over a failure to pay refunds to millions of angry and disappointed customers.

Holiday giants have been routinely trying to fob people off with vouchers or an offer to re-book for a later date.

And many have added to the misery of people who have lost holidays by delaying paying refunds.

Pictured: Stock photo of an annoyed woman at an airport. Many holiday giants have added to the misery of people who have lost holidays by delaying paying refunds

The Competition and Markets Authority (CMA), which has been investigating scams around the coronavirus pandemic, has written an open letter to more than 100 firms demanding changes under the threat of legal action.

It has not named them. But some companies, including package holiday giant TUI, have previously been accused of failures by the consumer group Which?

Separately, the Civil Aviation Authority (CAA) is putting pressure on airlines, including Ryanair, over allegations they are making it extraordinarily difficult for customers to get their money back. 

But some companies, including package holiday giant TUI (plane pictured), have previously been accused of failures by the consumer group Which?

Senior director of consumer protection at the CMA, George Lusty, said: ‘If companies want to avoid CMA action, then they must follow consumer protection law by offering refunds where they are due and refunding customers on time.’

The letter states the CMA has received over 17,500 complaints about businesses in the package travel sector.

The damning charge sheet alleges:

  • Consumers are not being offered and/or provided full cash refunds in accordance with their legal rights.
  • Companies are failing to pay refunds without undue delay and not later than 14 days after cancellation.
  • They are only offering a voucher or the right to rebook a holiday instead of a refund.
  • The firms refuse to repay deposits and/or charging cancellation fees when people exercise their legal right to a refund.
  • They give misleading information about cancellation and refund rights.
  • Travel operators make it difficult to claim a refund by referring people to telephone lines which are constantly engaged.

The CMA recently secured policy changes from Hoseasons and Sykes Cottages to ensure they offer refunds for holiday accommodation cancellations.

In May, the consumer champion Which? accused TUI of breaking the law by making customers accept a credit note to exchange for a cash refund at a later date.

In the same month, it published a survey revealing that 84per cent of Ryanair customers had not received a refund they had asked for.

Customers reported that Ryanair attempted to force them to accept vouchers. It even suggested, at one point, that refunds could take 12 months.

 Customers reported that Ryanair check-in sign pictured) attempted to force them to accept vouchers. It even suggested, at one point, that refunds could take 12 months

The editor of Which? Travel, Rory Boland, said: ‘The CMA is right to remind companies of their legal obligations given the huge volume of refunds that are still being withheld by package travel operators.

‘Customers have been sympathetic to delays in companies returning their money, but firms need to understand they cannot continue to break the law without consequence.

‘It’s vitally important that as international travel resumes, consumers who have been let down by the industry are not forgotten about.

‘The CMA must be ready to intervene with enforcement action, and the CAA must take an equally strong stance against airlines that are also withholding refunds from customers, as too many continue to flout the law without fear.’

TUI referred questions to the holiday industry trade body Abta, which said members had been placed under ‘extraordinary pressures’. It blamed delays on airlines.

Abta said: ‘Many airlines, in particular, have been and continue to be very slow in passing refunds back to package holiday businesses, which means they are unable to refund their customers as promptly as they would wish.

‘It is essential, therefore, that effective regulatory action is taken against the airlines that are not currently refunding with seven days, as required under relevant consumer protection legislation.

‘Many travel agents and tour operators have loyal customers, who have been understanding and supportive, and either rebooked holidays for a later date or accepted Refund Credit Notes, which are financially protected.’

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