Holiday firms face legal action if they fail to pay refunds

Holiday firms have already been warned of legal action over failing 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 in the future.

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

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

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

Separately, the Civil Aviation Authority (CAA) is putting pressure on air companies, including Ryanair, over allegations they are making it extraordinarily difficult for clients to obtain money back. 

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

But some organizations, 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 companies in the package travel sector.

The damning charge sheet alleges:

  • Consumers are not on offer and/or provided full cash refunds relative to their legal rights.
  • Companies are failing to pay refunds without undue delay rather than later than 14 days after cancellation.
  • They are only supplying a voucher or the right to rebook a vacation 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 details about cancellation and refund rights.
  • Travel operators allow it to be 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 clients accept a credit note to exchange for a cash refund at a later date.

In exactly the same month, it published a survey revealing that 84per cent of Ryanair clients 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 simply 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

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

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

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

‘It’s very important that as international travel resumes, consumers who have been unhappy by an 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 break industry trade body Abta, which said members have been placed under ‘extraordinary pressures’. It blamed delays on airlines.

Abta said: ‘Many airlines, particularly, have been and continue to be very slow in passing refunds back to package holiday businesses, this means they aren’t able to refund their clients as promptly as they would wish.

‘It is vital, therefore, that effective regulatory action is taken from the airlines that aren’t currently refunding with 7 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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