Travellers whose trips are cancelled because of the coronavirus pandemic face a summer of stress as companies rewrite the rules to avoid refunding them. Thousands of holidaymakers have been struggling since March to get their money back, and the problem is likely to worsen now the government has eased the ban on travelling abroad.
Summer bargains advertised by travel firms could be scuppered if new lockdowns are imposed in the UK or overseas. The law entitles customers to full refunds when a flight or holiday is cancelled, but many are being forced to accept vouchers or charged large processing fees.
Some companies are stalling claims by passing their liability on to others. Several airlines, which are responsible for issuing refunds under the denied boarding EU regulation, are insisting passengers apply through the agent who handled the booking. Package tour operators have been telling customers to reclaim the cost of their cancelled holiday from travel insurers, despite being liable under the package travel regulations. Some travel insurers have told customers with valid claims to recover the money through their bank or credit card issuer.
“Each company is passing the buck,” said Alice (not her real name), who has been struggling since March to get her cancelled flight to San Francisco refunded. “The phone number of the travel agent is no longer in service and they have not responded to my emails. Virgin Atlantic said it cannot refund me directly as it would be in breach of its contract with the agent, and risk “prosecution”. My bank says its not liable for the cost under Section 75 of the Consumer Credit Act. And my travel insurance only covers me if the company goes bust.”
A spokesperson for Virgin told the Observer that its email had incorrectly referred to the risk of prosecution, but that passengers must apply for a refund through the agent they booked with. “We work in partnership with travel agents, who are best placed to deal with those bookings made directly with them as they have access to the terms of the conditions of the booking and the final price paid, including any extras that may have been purchased,” he said.
Virgins policy contravenes the denied boarding regulation according to Coby Benson of the consumer law firm Bott & Co. “Airlines cannot delegate their legal responsibility to provide refunds, and court proceedings can be issued if they try,” he said. “But this tactic is widespread, and Im currently representing several thousand passengers trying to claim refunds.”
Campaigners say the travel industry is trying to safeguard its finances at the expense of customers. The consumer group Which? says it has been contacted by scores of holidaymakers left out of pocket after being illegally shunted between companies. “These attempts to pass the buck for providing refunds further erode trust in an industry that has repeatedly let people down over this difficult period,” said Rory Boland, editor of Which? Travel. “Meanwhile, some insurers and card providers have hardly covered themselves in glory by appearing to move the goalposts on the protection they offer to customers. Airlines and holiday providers that dont abide by the law must face strong enforcement action from the regulator.”
The government regulator, the Competition and Markets Authority, says the majority of complaints to its Covid-19 taskforce have been about unfair refund policies for cancelled holidays. It is considering legal action against companies that do not comply with the law. The Civil Aviation Authority has also launched an investigation after finding that only a “minority” of carriers have been issuing timely refunds. A spokesperson said: “We do not expect airlines to systematically deny consumers their right to a refund, and our review is considering whether any further action needs to be taken to protect consumer rights.”