Help could be at hand for the tens of thousands of holidaymakers who’ve been refused refunds by their tour operators or have been fobbed off with vouchers and credit notes.
The Competition and Markets Authority (CMA) says it will take holiday companies to court if they continue to flout the law and refuse to give customers cash refunds, which they are obliged to do under the terms of the Package Travel Regulations.
Its Covid-19 Taskforce has received hundreds of complaints about companies refusing to refund customers for services not provided and it is particularly concerned about holidaymakers being pressured to take vouchers instead of cash refunds for cancelled accommodation.
I’m also hearing that some tour operators, including some of the biggest, have put up prices so when holidaymakers try to use the vouchers to re-book the same holiday next year, they’re being forced to pay more money.
Consumer law requires that a full refund is offered if a business has cancelled a contract without providing any of the promised goods or services.
This includes if no service is provided because of restrictions during the current lockdown or if a consumer cancels because of the restrictions.
Under the Package Travel Regulations, holiday refunds must be provided within 14 days of the cancellation. For seats on flights from the UK or to the UK on a European airline, it’s seven days.
Unfortunately, the majority of tour operators seem to be ignoring the Package Travel Regulations, automatically issuing vouchers instead of refunds and only giving cash back when holidaymakers insist.
Very few are processing cash refunds within 14 days. TUI the largest, told me this week that it’s processing them within 28 days, but I’ve heard from TUI customers, amongst others, who’ve been waiting now for more than 40!
It doesn’t help that ABTA, the travel industry’s biggest trade body, has told holiday companies that it’s acceptable to issue Refund Credit Notes instead of cash, so tour operators are now telling customers that the law has changed, pointing towards ABTA’s guidance.
It’s good that the CMA has come out now and made it clear that customers are entitled to cash refunds since, of course, the law has not changed. However, you don’t need to wait for the CMA to take your holiday company to court to get your refund. If you paid by credit or debit card, you should be able to get your money back fairly quickly from your card issuer, usually your bank, or you might be able to file a ‘small claim’ through the courts yourself.
If you’re struggling to get your bank to issue a refund, this article should help.