Companies refusing to refund for holiday accommodation cancelled amid COVID-19 outbreak may be sued

The Competition and Markets Authority threatens legal action against companies that fail to refund people for holiday accommodation cancelled due to the coronavirus outbreak.

The row over refunds for cancelled holidays continues to swirl leaving holidaymakers out of pocket and angry. And no wonder. 

While some companies come clean about their devasting cashflow and ask for breathing space, others are claiming that they are entitled to offer a travel voucher instead of a refund. This is unlawful.

The Competition and Markets Authority has stepped in with a threat to take legal action against companies that fail to refund people for holiday accommodation cancelled due to the coronavirus outbreak.

The consumer watchdog is eyeing those businesses refusing refunds and pressuring people to accept vouchers for holiday accommodation, which can only be used during a more expensive period.

Four out of five complaints made to its Covid-19 Taskforce are about cancellations and refunds. It said.

“The CMA acknowledges that most businesses are acting reasonably in what are unprecedented circumstances, and the current crisis is placing everyone under pressure, but consumer rights cannot be ignored,” it said as it announced its investigation today.

“If it finds evidence that companies are failing to comply with the law, the CMA will take appropriate enforcement action, including moving quickly to court if a firm does not address its concerns. Individuals can also take their own legal action against unfair terms should they choose to.”

Kane Pirie, Managing Director at VIVID Travel, the founder of Right to Refund campaign, has been campaigning for the rights of the consumer to receive a refund after he heard the ‘cries of thousands of shocked consumers who have been given the refund run-around by large tour operators, in many cases breaking the law’.

He expressed his delight with the CMA:

“The UK’s largest tour operators, who followed ABTA’s doomed Credit Refund Note scheme, now find themselves the targets of a law enforcement agency with a fearsome reputation. We tried to warn them, and ABTA, but were ignored.

“If those giant tour operators with wealthy shareholders did not understand before that ABTA do not make the law before, they will today. Their position is indefensible: morally, legally and commercially.

“Time is now up on the bungled Great Refund Robbery. Right To Refund said from the start this is a turkey that would not fly, and with over 23,000 supporters and the CMA in town, that turkey is now plucked, buttered and in the oven.”

Although the initial CMA investigation does not cite flight refunds, Matt Buffey, head of consumer protection at the UK Civil Aviation Authority, issued a statement which said:

“We welcome the investigation from the Competition and Markets Authority (CMA) into cancellation rights and refunds and the statement on its view of how consumer protection law applies.

“We will continue to work alongside the CMA on this issue as it progresses. We expect airlines to provide refunds for cancelled flights as soon as practically possible.”

Also Read: Why getting a refund is so difficult amid the Coronavirus outbreak