Travel companies that did not reimburse customers after holidays were canceled during the coronavirus crisis will face legal action, was announced today.
The Competition and Markets Authority said it would take business before the court after it was revealed that thousands of UK holidaymakers are owed up to £ 7 billion from companies that refuse to reimburse customers.
The authority said that four out of five complaints it receives every day from British consumers that refunds are denied for canceled trips.
Airlines including British Airways, easyJet, Jet2, Virgin Atlantic, Ryanair and TUI have been accused of challenging the law and driving customers to accept credit note bills that have little consumer protection and can prove worthless like a carrier bus.
The CMA said, & # 39; If it finds evidence that companies are not complying with the law, the CMA will take appropriate enforcement action, including moving quickly to court if a company fails to address its concerns.
& # 39; Individuals can also take their own legal action against unfair terms if they choose to do so. & # 39;
Jo Lemmon Sparkes, 39, and wife Kirsty, 33, from Cambridge, had canceled a birthday trip to Budapest two days before being thanked to jet off yet fighting for their £ 700 return – and claiming 18 attempts to contact Ryanair have gone unanswered went
A lost couple is one of many who have canceled hundreds of pounds of holidays without being annexed for a refund.
Jo Lemmon Sparkes, 39, and wife Kirsty, 33, had canceled a birthday trip to Budapest two days before they were due to jet off yet to fight for their £ 700 return – and claim 18 attempts to contact Ryanair have gone unanswered.
How aviation companies bend the rules
British Airways: The redemption option has been removed from their website, but the option to request a voucher remains. The customer service line is often busy or puts callers on hold for hours.
Customers are encouraged to request a voucher equal to the value of their flight, but must pay more when it ends up being more expensive.
BA says customers should call to re-book, refund or choose a coupon. Refunds can be requested up to 12 months after the original expiration date.
EasyJet: The refund option was taken from the & # 39; website, but reset to customer complaints.
The airline tries to repay customers within 28 days, but admits it could take longer. A spokeswoman said: & # 39; We can assure customers that these rights will be available long after & # 39; their canceled flight was due to flights. & # 39;
Ryanair: Offers full refund within 30 business days, then a U-turn and is & # 39; highly recommended & # 39; customers instead of a voucher. Suppose that after a year, customers will be able to switch vouchers for cash.
A spokeswoman says: & # 39; Customers who choose a voucher but do not resolve it within 12 months can still apply for a refund.
Customers who choose not to accept a free relocation or voucher will be reimbursed over time, once this crisis is over. & # 39;
Virgin Atlantic: Credit notes are issued but can be rejected in favor of a full refund, with claims processed within 90 days.
A spokeswoman said: & # 39; The credit (equal to the value of & # 39; canceled flight) can be used to re-book on alternate dates, allowing a destination and name change, for trips up to May 31, 2022.
If the re-recognized date is November 30, 2020, we will differ from each tariff difference. & # 39; Refunds will take longer than normal.
Tonion: Customers can opt for a refund as a credit note, but can only reimburse for their money when their credit for refund is received – up to four weeks after the expiration date.
A spokeswoman said requested refunds will take about four weeks.
Jet2 offers cash reimbursement but with delays due to an & # 39; unusual & # 39; number of calls.
They had planned the Hungary holiday with five friends to celebrate Jo's birthday for half a year and were & # 39; smart & # 39; then the flights were canceled just two days before they were scheduled to fly on March 20th.
The frustrated couple has been trying to contact Ryanair since 19 March, with whom they fly, but claim almost 20 separate efforts to reach Facebook, phone and email have not received a response more than a month later.
Coffee Shop Worker You, from Cambridge, said, & # 39; It's just fine, since we & # 39; ve all been looking for so long and it had been a nightmare to try to find a weekend when & # 39; we were all free.
& # 39; We understand that it's no one's fault, but communication has been terrible.
& # 39; I stayed for 17 minutes, which cost me £ 10, and cost an hour and a half on & # 39; e live chat on their website – and came by no means.
& # 39; They didn't even acknowledge that they received the messages or that they know we're still waiting.
& # 39; It's so frustrating to have literally had no contact with anyone.
& # 39; We are left in the dark, we do not know what is happening. & # 39;
You had booked the flights for five of their friends, who all had free books for the special occasion, for £ 150 each.
With the shutdown of the coronavirus put enormous pressure on the economy, she said some of them simply could not pay to lose the money because of furloughed.
You said, & # 39; At a time like this, I don't even know if my job will be there by the end.
& # 39; If it was just a £ 60 flight, I could just let it go, but it's a lot of money and some of us are unable to let just £ 150 go.
& # 39; Getting the money back is important to some of us, so I'm stuck. & # 39;
The group began planning the trip in June 2019 and are now worrying that they will never spend in Budapest, in order to & # 39; find a suitable time for all five & # 39; total nightmare & # 39; used to be.
You said the situation became even more confusing, because she still didn't receive Ryanair emails after the flight was canceled and asked her to check in.
She added: & # 39; I've heard that Ryanair is offering vouchers, but we don't want vouchers.
& # 39; I can't divide a voucher in five ways and I don't think I want to fly with Ryanair again because now I know this is how they handle these kind of situations and they've caused us all this stress.
& # 39; We all really looked forward to it.
& # 39; One of our friends arrived the day before & # 39; we flew half way from Plymouth.
& # 39; We haven't seen her since Christmas, so it's just so disappointing.
& # 39; I won't let it.
& # 39; We and everyone else in this situation deserve a full refund and I will be the first in & # 39; e queue as they start issuing. & # 39;
You and Kirsty plan the Hungary holiday with five friends to celebrate Jo's year for half a year and say "communication" has been terrible since it was canceled by Ryanair
Ryanair said: & # 39; For each canceled flight, Ryanair gives customers all options issued under EU regulations, including free movements and refunds in & # 39; e form of cash or vouchers.
& # 39; The processing time for money reimbursement takes longer due to the fact that we have to process 10,000 times the usual volume of cancellations and have fewer staff due to social distance measures.
& # 39; Ryanair offers coupons and free movements to automate these and give customers an alternative. Customers who choose a coupon but do not redeem it within 12 months can still apply for and receive a refund after this 12 month period. This also includes a partial redemption, in which the portion of the unused voucher is refunded.
& # 39; Customers who choose not to accept a free relocation or voucher will be reimbursed over time, once this unusual crisis is over.
& # 39; We apologize for this inconvenience this may cause and we thank our customers for carrying us. & # 39;
In its warning to businesses, the CMA said it has identified three sectors that are important – weddings and private events, holiday accommodation, and nurseries and childcare providers.
It will address these areas as a priority and then move on to other sectors based on the information received by the task force.
However, it added that most companies act reasonably in unusual circumstances, and the crisis puts everyone under pressure.
Andrea Coscelli, chief director of & # 39; e CMA, said: & # 39; Our Covid-19 task force sheds some light on some of the major issues that consumers face in & # 39; e nas of this pandemic. In addition to price gold reports, we now see cancellation issues in their thousands.
& # 39; So far, the CMA has identified weddings, holiday accommodation and childcare as certain areas of care.
& # 39; The current situation poses challenges for everyone, including businesses, but that does not mean that consumer rights can fall by the wayside. If we find evidence that companies do not comply with the Consumer Protection Act, then we will be hard pressed – that is, preparing enforcement cases and moving to court action where there is a strong reason to do so. & # 39;
Adam French, a consumer rights expert at Who ?, said: & # 39; We have heard of many sad people who & # 39; do not take the risk of spending significant sums of money & # 39; leave them outside to get refunds for canceled weddings, private events or holiday accommodation.
& # 39; It is good that the CMA sectors are investigating those who plead their legal responsibilities over refunds and cancellations by trying to rely on unfair and unpredictable conditions.
& # 39; The regulator should be prepared to step in and take strong action against all businesses that are not found to be infringing consumer perception and benefit consumers during these unusual times. & # 39;
Retired teacher says she has not been offered a refund by TUI for a canceled £ 10,000 trip to Disney World with grandchildren
Jan Schneider, 64, intended to take granddaughter Isaac, seven, to Disney World in Florida, but was unable to secure a refund of the £ 10,000 booked trip to TUI
Jan Schneider, 64, was planning to take her son and grandson for a special trip to Disney World in Florida, but has now lost more than £ 10,000 without a down payment offered by TUI.
The retired teacher saved special education for the trip so she could spend time with seven-year-old Isaac and Ben, 37.
They had been looking forward to the trip, which was booked for Christmas as a gift for Isaac's birthday on Boxing Day.
The holiday was booked for April 5 to 16, but was canceled because of the global pandemic and Jan has been unable to contact TUI on & # 39; phone for a fee since then.
Jan donated her kidney to her son Ben, 37, who needed appropriate medical coverage for the trip
She also had to pay for World First travel insurance, after she donated her kidney to Ben who needed appropriate medical coverage, and paid for ESTA visas.
Jan, a retired special education teacher, booked the trip for Isaac's seventh birthday
Jan from Morden, Surrey, said: & # 39; What I don't like to do is we don't answer the company at all.
& # 39; There was no contact with them at all, although they were trying to get through the phone.
& # 39; I am told to call back or if I do, they are closed even if it is between 9 am and 5 pm.
& # 39; I offered nothing at all, let alone a credit note. I just need my money back or at least the thought of being in contact with me in some way.
& # 39; I don't know who else I can turn around and find this very concerning.
& # 39; I am a retired special education teacher and saved for this trip so we could all spend some special time together.
& # 39; Vacation has cost me just under £ 10,000 and so a hefty amount if I was only on a teacher pension. Even then, the insurance was up there and Esta-visa. & # 39;
TUI, the UK's largest tour operator, extended the suspension of its facility for the next six weeks yesterday, after previously suspending its operation until May 14.
The company announced that all journeys would be canceled by June 11, warning customers who & # 39; t want cash reimbursement that their call centers & # 39; were incredibly busy & # 39 ;.
British Airways said on Tuesday that it was laying off up to 12,000 workers and last week Richard Branson asked the government for its wrecking Virgin Atlantic business, for about £ 500 million.
EU member states want air carriers to issue permissible vouchers for cancellations
A dozen EU member states have asked the European Commission to allow air carriers to allow vouchers instead of money for canceled flights.
The group, which includes France, Ireland, the Netherlands and Portugal, issued a joint statement requesting a temporary change in consumer law in order to continue with high running costs & # 39; # 39; despite most planes being grounded due to the pandemic of the coronavirus.
Enabling aviation companies to issue vouchers instead of cash would & # 39; be a solution to current restrictions on airlines' cash flow & # 39 ;, they wrote.
The group demanded a common level of consumer protection in relation to vouchers, including the right to reimbursement if a new booking is not used at the end of its validity.
Under the regulation, commonly referred to as EU261, which remains applicable in the United Kingdom, passengers are entitled to a full amount of money within seven days of canceling a flight due to departure from an EU airport.
It also covers flights that are not operated by an EU-based airline from outside the EU to an airport within the block.
However, many carriers refuse to offer refunds or make any payments within the legal timeframe.
Rory Boland, editor of consumer magazine Which? Travel, said: & # 39; It is unbelievable that some EU member states are requesting to temporarily suspend the legal right of consumers to cancel money for canceled flights in the middle of & # 39; an outbreak of coronavirus, not least as many people are now in difficult financial situations of their own and need their money back.
& # 39; Not only would this relocation be bad news for consumers, it would be a disaster for tour operators not waiting for payments returned by air carriers to pursue their own legal obligations to return customers.
& # 39; The UK Government must urgently confirm that it continues to support consumers' right to money reimbursement, and step in with support for the sector to allow them to pursue this legal obligation. & # 39;
While travelers who book breaks with credit cards also have difficulty getting money back from banks, despite Section 75 of the Consumer Credit Act, which do not describe fees in law.
Instead, lenders have told their own customers that they are not eligible for lump sum, or they have demanded that they first pursue the cash from & travel company, which is not a legal requirement.
The British Travel Agents Association (Abta) has lobbied ministers to relax rules that do not require airlines to issue refunds within a certain timeframe – though most have at least ignored them and appeared to be using negotiated behavior to to pay.
Airlines use negotiation tactics to make it almost impossible for holidaymakers to claim refunds for canceled flights.
Hundreds of readers have contacted us to complain that major airlines are holding back illegal refunds that should not be paid within a week.
Many say they are convinced to accept credit note vouchers that have little consumer protection and can prove worthless if an airline is lost.
Others describe the reimbursement process as unclear, complex or timely, and force them to give up.
On Tuesday, the powerful Commons Transportation Commission of MPs confirmed plans to investigate the issue in a series of hearings with aviation bosses next week.
Under EU law, passengers are entitled to a full refund of the cost of a canceled flight within seven days, up to 14 days, if they have booked it as part of a package.
But carriers are delaying issuing refunds for fear of bust – so cash from holidaymakers is essentially used as interest-free loans for aviation companies with crisis.
This has a knock-on effect on package companies, who also don't wait for airline companies to repay them before they can issue their own refunds.
Critics say a lack of government action on the issue has turned the travel industry in & # 39; t the Wild West, and families from & # 39; left out at a time when many are under financial strain. Estimates from the industry suggest that companies are sitting on £ 7 billion in unpaid refunds.
The chairman of & # 39; s committee, Tory MP Huw Merriman, said: & # 39; Yes, airlines have a need for cash, but this should be borne by their creditors, not by passengers who are not legally entitled to a refund.
& # 39; Many people have their own financial worries and may not be able to use a future travel voucher. & # 39;
BA has been accused of fraudulent conduct by removing a return request from its website while retaining the option to receive a credit note coupon for a future flight.
Passengers are told to call a customer service number – but the line is often blocked. When we called this week, it played an automated message, then cut out.
Will the rules be changed on refunds?
Industry insiders have suggested that the Department of Transportation (DfT) is set to announce weeks of inaction on the issue.
The British Travel Agents Association (Abta) has been lobbying ministers to relax rules that do not require air carriers to issue refunds within a specified timeframe – though most have ignored them in any case.
They want the credit memo to retain Atol protection, and give insurance to vacationers who aren't afraid their money will disappear.
The situation is aggravated by the uncertainty over when flights will start again. The International Air Transport Association (IATA) has warned that the industry is facing a & # 39; apocalypse & # 39; stands and more than half of world carriers could breastfeed.
EasyJet has received a £ 500 million emergency loan from & # 39; Treasury. But the future looks less hopeful for Virgin Atlantic, whose request for state support was denied.
Even BA boss Alex Cruz has warned that the nation's flag carrier has a fight for survival. In a dramatic announcement to staff yesterday, the company said it fired a quarter of them – 12,000 people.
But an Abta spokeswoman says: & # 39; Customers whose holidays have been canceled because of the pandemic are absolutely entitled to a refund, and where & # 39; money requests are requested, they should be given as soon as possible. & # 39;
EasyJet customers have also described endless waiting times to talk to customer service. However, it is easy for customers to create a credit note that is valid for one year.
Ryanair, Virgin Atlantic and TUI also automatically offer credit notes. These can be rejected in favor of a full refund.
However, Ryanair has warned that passengers who do not want their money back will & # 39; be placed in & # 39; a cash queue until the Covid-19 emergency is over & # 39 ;.
Virgin Atlantic is in crisis and could collapse at the end of May, unless a buyer is found. This would render all credit notes worthless unless the government steps in to protect coupons under Atol. Then, even if an airline folds, customers would get their money back.
Wizz Air has returned flights from Luton to various destinations in Europe this week, meaning passengers who do not want to travel are denied the right to a refund.
Consumer Champions Which? say that the move was & # 39; nothing more than a cynical cash grab & # 39 ;.
Simon de Broise, a lawyer who specializes in banking and finance disputes, said although he does not normally claim section 75 of the Consumer Credit Act works well, reports that banks refuse to process claims on .
The Senior Associate at Collyer Bristow said, & # 39; In today's climate, suppliers, in & # 39; t especially those in hard hit sectors such as travel, save as much cash as possible and try to understandably offer alternatives for cash, such as coupons or credit notes.
There is no problem with them per se, but consumers do not have to accept these alternatives and, subject to meeting certain requirements, are usually entitled to a refund.
& # 39; The reports of banks that make claims harder, and even refuse to process them, are very surprising and very concerning.
& # 39; Although it is correct that the right to a refund is not automatic – for example, under p.75 of & # 39; e Consumer Credit Act must be a breach of contract or misrepresentation – the matters we are currently in, for example a flight canceled by an airline, will not be disputed and therefore claims on & # 39; the normal way is processed.
& # 39; If this does not happen, then the regulator may need to step in. & # 39;
Couple's dream Caribbean cruise vacation for a 60th birthday turns into £ 3,500 nightmare after Holiday Gems refund rejects
Carol, 55, and Christopher Avery, 60, are owed £ 3,500 for a canceled Caribbean vacation by Holiday Gems. The couple from Swindon book the dream holiday to celebrate Christopher & # 39; s birthday
Carol Avery, 55, is spending almost £ 3,500 out of booking a reservation for a dream vacation to the Caribbean to celebrate her husband's 60th birthday.
The couple from Swindon booked two hotel stays in Punta Cana, Dominican Republic, with Holiday Gems, but have been denied a refund by the travel agency
Initially, Carol, an internal project manager, had planned to take environmental air test engineer Christopher on March 15 for a Caribbean cruise on March 12, before leaving for another 12 nights to Punta Cana.
However, this was canceled because of the coronavirus crisis, so the couple bought a new hotel stay in the & # 39; s Dominican Republic on March 10 with the travel agency.
They plan to go to the original hotel then, but on their flight to Miami it was announced that the US had closed its borders to British tourists.
Carol and Christopher could reschedule their flight to return to the United Kingdom on March 17, instead of head to the Dominican Republic as originally planned.
On return, however, they were told that they would not be able to pay back the first hotel booking – in order to & # 39; t show them as a & # 39; no show were – and they could only get a credit note for the second hotel.
Carol said: & # 39; We received a phone call from a Holiday Gems representative, stating that we would be offered a credit note for the second 12 nights hotel accommodation.
& # 39; When we called the first 10 nights, we were told that no record had been submitted for restitution and that it was listed as & # 39; no show & # 39; on our part.
& # 39; This was unbelievable when we couldn't even fly to DR and they sent emails saying that everyone should return as soon as possible, in order not to resorts would be close.
& # 39; We informed the Holiday gems rep that we did not want to accept a credit note, and wanted a full refund, at which point he started to get bored and said & # 39; there is no way that you will get a refund.
& # 39; We informed him that we knew our rights and we would seek every opportunity to get a refund even if we needed it to a small claims court, where & # 39; he replied & # 39; we would definitely get nothing and we would probably have to pay them costs also & # 39 ;.
& # 39; At this point, he was totally annoying and hung up directly on us. & # 39;
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