UPDATED 25 JANUARY 2021
If your package holiday* or flight has been cancelled due to coronavirus, you’re entitled to a full cash refund. If you had to come home early, you’re entitled to a cash refund for the unused elements of the package or a pro-rata refund for the remaining days.
You’re entitled to a cash refund within 14 days of the cancellation or curtailment of your holiday, or within seven days of your cancelled flight. The refund should be paid by the company that was responsible for your holiday, so it might not be the travel agent you booked through, it’s most likely to be the tour operator – you should have an ATOL certificate which gives the name of the company responsible for the trip. If you booked a flight via an agent, you’ll have to go back to the agent – not the airline – to ask them to apply for a refund.
Some travel companies will offer you an incentive to re-book or take a credit note instead of a cash refund. Refund Credit Notes (but not vouchers) have the same financial protection as your original holiday booking, as long as they’re issued before 1 April. Any Refund Credit Notes issued after 31 March might not be protected.
If you don’t want to rebook your holiday (which might be the easiest option for you and definitely the best option for the travel company) and you’re not prepared to accept a credit note, you can insist on a refund.
While most travel companies and airlines are issuing refunds faster than at the start of the pandemic, some are still dragging their heels. In this case, you can try to get a refund from your credit or debit card issuer.
Remember that when you submit a claim, you need to claim against the company responsible for providing your holiday, which might not be the travel agent you booked through.
Credit card claim
Under Section 75 of the Consumer Credit Act, credit card companies are liable for the failed delivery of goods and services, so if you paid for a holiday you didn’t get or it wasn’t as advertised (ie cut short), you have a legal right to claim a cash refund from your credit card issuer as long as the cost of the holiday was more than £100. You can make a claim under the Consumer Credit Act even if you only paid the deposit on your credit card, as long as the holiday cost more than £100 and not more than £30,000.
Note that a Section 75 claim can only be made if the holiday booked is for the main cardholder, so you can’t claim for a holiday booked for someone else (unless they were accompanying you) or if it was paid for using a second card on the account. However, you might be able to make a chargeback request instead – see below. You might also be able to make a chargeback request for claims of less than £100 and more than £30,000.
If you booked a flight or a package holiday with a tour operator via a third party travel agent your Section 75 claim might be refused because the introduction of an intermediary in the sale process has “broken the chain of credit”. If this is the case, you can try a chargeback request instead (again, see below).
To start a claim, you need to call your card issuer, which is most likely your bank, and tell them you want to raise a Section 75 dispute or a chargeback request. Before you do, it’s important to check who’s got your money, otherwise your claim could fail.
However, I’ve found that some banks are incorrectly rejecting claims, possibly because they’ve had to draft in inexperienced staff working from home to deal with a flood of claims.
When I called Lloyds Bank to claim a refund on my MasterCard after my holiday company offered me only vouchers instead of cash, I was told that holiday refund claims are being refused as tour operators are claiming that the cancellations due to the coronavirus are ‘force majeure’, in other words, outside their control. This is incorrect advice. Under the Package Travel Regulations, companies selling package holidays must refund clients for cancellations, regardless of the reason. When I called a second time, I was told that I couldn’t claim a refund as I’d already been offered vouchers by the travel company. Again, this is incorrect as consumers have the right to a cash refund. When I called a third time (I’m persistent!), I was told that any complaint I raised would be refused because “airlines can’t afford to refund everyone”!
So, if your credit card issuer refuses to let you raise a claim, or tries to persuade you that you that vouchers are an acceptable resolution, here’s what you should tell them**:
1: Package holiday sales are governed by the Package Travel Regulations. Some holiday companies are telling clients that ABTA is the governing body for the travel industry and that ABTA is advising them to issue refund credits instead of cash refunds, but ABTA is a trade association, it doesn’t make the rules, and while it has asked the Government to allow holiday companies more time to issue refunds, the Government hasn’t done so.
2: Part 4 of the Package Travel Regulations makes it clear that the holiday company is responsible in all circumstances for the performances of the package, for arranging a pro-rata refund if that is not possible, and for flying clients back to the UK where the package holiday cannot be completed, regardless of the reason. The holiday company cannot relieve itself of these obligation in its Terms & Conditions.
Note that Clause 16 (4) of the PTR states that clients are not entitled to compensation unless the holiday company is at fault.
3: Clause 14 of the Package Travel Regulations states that clients whose holidays are cancelled or disrupted are entitled to a cash refund within 14 days.
4: Clause 8 of Part 2 of the Package Travel Regulations states that in the event of a dispute between the client and the tour operator, the burden of proof rests with the tour operator, so they must show they have complied with the Package Travel Regulations.
If you paid with a debit card, the card issuer isn’t legally obliged to refund your holiday but you might be able to make a ‘chargeback’ claim for services you didn’t receive. Under this procedure, they may try to get a refund on your behalf from the tour operator or travel agent.
The process is the same as above, the only difference being that your card issuer doesn’t have a legal obligation to provide a refund.
You can also make a chargeback request if you paid for someone else’s holiday on your credit card or a second card holder on your account made the booking.
Is there a time limit for claims?
Section 75 claims in England must be made within six years of the cancellation, in Scotland it’s five. You’ve got less time for a chargebacks since claims will only be considered if made within 120 days of the cancellation.
If you’ve made a claim on your credit or debit card I’d love to hear how you get along, let me know in the comment box below.
*A package holiday is defined by the Package Travel Regulations as a flight plus one other element, such as accommodation or a tour, booked together. You should have been advised at the time you booked your trip if it was a package and issued with an ATOL certificate so if in doubt, check your paperwork.
**Please note that I am a travel journalist, not a lawyer, so the above is for general advice only. If you require legal advice making a claim, you should consult a solicitor or contact Citizens Advice.