Kristen Zanoni  |  July 13, 2020

Category: Covid-19

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Disappointed woman sitting on floor of airport with suitcase

Due to the high volume of complaints about package holiday businesses, the CMA announced in an open letter the expectations of businesses during the coronavirus pandemic.

Cancelled holidays have been a side effect of the global lockdowns and travel bans of the coronavirus pandemic. To date, the CMA has been sent over 17,500 consumer complaints regarding difficulties receiving proper cancellations and refunds from package holiday businesses.

The CMA’s letter has been sent to over 100 package holiday companies that have been the target of most of the complaints, although the CMA has not specifically identified any of the businesses. 

The programme of work launched by the CMA aims to examine reports of package holiday businesses that have failed to respect consumers’ cancellation rights during the COVID-19 pandemic.

The guidance is an overview of how the law operates, helps consumers understand their rights, and guides businesses to treat consumers fairly.

In the letter to package holiday companies, the CMA emphasises the purpose of the COVID-19 Taskforce and the enforcement of legal action the watchdog is prepared to take if businesses do not comply with consumer protection laws.

The letter speaks directly to the concerns about businesses not providing refunds for cancelled holidays, and says consumers are entitled to refund in compliance with consumer law. 

More specifically, the letter states that companies have not been meeting the obligations of the Package Travel and Linked Travel Arrangements Regulations 2018 (PTRs). The requirement of these regulations is that companies provide refunds swiftly, and no later than 14 days after the cancellation.

Flight status board shows rows of "flight cancelled"Moreover, package holiday companies have been participating in unfair commercial practices, including providing deficient or disingenuous information to customers regarding their statutory rights concerning cancelled holidays, which could be breaching the Consumer Protection from Unfair Trading Regulations 2008 (CPRs).

Under the Enterprise Act 2002, the CMA can enforce action for these breaches of consumer law, according to The Guardian.

The details of consumer statutory rights in the Enterprise Act include the right to a full refund after cancelled holidays, which strictly means a cash refund and not just a voucher or rescheduled holiday.

The act also states consumers should not lose their deposits or be charged termination fees from cancelled holidays; those who have booked holidays have the right to be given clear information without being deceived about their statutory rights.

And lastly, the act says, consumers are entitled to cancel a holiday or request a refund without any significant difficulty. Consumers should be able to easily contact a business to discuss concerns. 

The CMA understands that package holiday companies have been affected during the pandemic, but it still demands compliance with consumer law.

If a business has breached consumer law, the CMA warns that the company must bring themselves into immediate compliance by following and carrying out the aforementioned rules.

Until recently, holiday letting firm Sykes Cottages was withholding full refunds to customers who cancelled holidays, but the policy has been overturned due to actions taken by the CMA. Sykes and 24 business and brands owned by Sykes, including Pure Cottages Group and Cabris Bay Holidays, agreed to:

  • offer a full cash refund to customers whose holidays were cancelled due to government restrictions and who have not already rebooked;
  • convert unused credit vouchers to cash, according to customer preference; and
  • provide the CMA with monthly reports on how many refund offers are made and accepted.

Businesses in the travel sector have dealt with significant changes due to the pandemic, but if they do not comply with consumer law, they risk enforcement action by the CMA or Trading Standards. 

The open letter sent to holiday package businesses states that the CMA is not yet proceeding with enforcement actions, but it is consistently monitoring complaints. If complaints about a company keep being reported to the CMA, enforcement actions will begin. 

Additionally, individual customers have the right to take action against a business in the small claims court. 

Did you face difficulty when requesting a refund for a cancelled holiday? Let us know in the comments.

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