UK holiday firms ordered to pay refunds for trips cancelled in Covid crisis
UK package holiday firms have been ordered to offer refunds to customers whose trips were cancelled due to the coronavirus pandemic after the regulator found they were illegally holding onto the cash.
The Competition and Markets Authority (CMA) said it had received more than 17,500 complaints from consumers looking to get their money back.
It has written to more than 100 of the most commonly criticised companies, stating that full cash refunds should be provided “promptly and without undue delay”.
“The CMA has been receiving reports that businesses have not been respecting their customers’ statutory rights to a refund for package holidays that were cancelled by either party due to certain lockdown restrictions imposed by authorities in the UK and abroad,” it said.
Holiday firms had been engaging in unfair practices or providing misleading information to customers about their rights, a CMA investigation found, with customers refused refunds within the 14-day period required by law or deflected with the offer of a voucher or rebooked holiday.
Holiday firms and airlines have come under fire over attempts to cling on to customers’ payment as they burn through cash after global lockdowns to stop the spread of the pandemic crippled travel demand.
The CMA also found that consumers had deposits withheld and were charged cancellation fees when exercising their legal right to terminate a package holiday and get a full refund.
Firms also went out of their way to prevent customers from making contact, creating “significant barriers” by using phone lines that were swamped with callers or offering no reasonable means of communication.
"When consumers are contacted, either about existing or new bookings, they should be given clear and legally correct information about their options following termination. These should always include the option of receiving a full cash refund without undue delay and in any event not later than 14 days," the CMA said.