Video report by ITV News Consumer Editor Chris Choi
The UK’s biggest travel firms and airlines are breaking the law by delaying refunds for trips cancelled due to the coronavirus pandemic, according to a consumer group.
An investigation by Which? found that some companies are refusing to provide refunds in a breach of their legal obligations, while others are providing vouchers or credit notes “which may prove to be worthless” if holiday firms collapse.
It cited industry estimates that up to £7bn in payments made by UK customers are affected.
Which? Travel Editor Rory Boland explains the situation 'millions' of holidaymakers are facing:
Which? said it found that none of the country’s 10 biggest holiday companies, including Tui and Jet2, are offering full refunds within the legal time frame, and some are refusing to provide refunds altogether.
Ryanair has been criticised for sending vouchers to people who requested a cash refunds.
The vouchers then explain how to claim their money back, despite the fact customers have already asked for them.
Under EU law, travel companies must refund customers within 14 days if their package holiday is cancelled.
Which? also contacted the UK’s 10 largest airlines – including British Airways and easyJet – and claimed that none are refunding passengers according to the law.
Under the EU’s Denied Boarding Regulations, passengers are due a refund within seven days if a flight with an airline based in the UK or EU, or from an airport in the UK or EU, is cancelled.
Which? has launched a 10-point plan requiring urgent action from the Government, travel companies and insurers which it claims will help the industry and protect holidaymakers.
Extending the 14-day refund period for package holidays to one month
A temporary Government travel guarantee fund to support firms unable to fulfil their legal obligations
All consumers eligible to receive a refund must be offered cash
Which? offers the follow advice:
Should I accept a credit note from a package holiday company?
No. Until the CAA confirms that these refund credit notes are fully protected by Atol we are advising consumers to reject them. If your package holiday has been cancelled, you are entitled to a cash refund by law so don’t be fobbed off. You may find your company flatly refuses a refund, despite the law. Some are claiming that they are waiting for the government to mediate. The government should weigh in on the dispute within the next week or two, so for now continue to turn down any offers of a credit note and insist on a refund.
Should I accept a voucher from a package holiday company?
No. Some companies are offering their own vouchers and if the company was to go under you would not be able to get your money back easily. Regular vouchers from holiday companies have never been financially protected. In some instances, these vouchers are incentivised, and worth more than the original booking. This is classed as compensation and is not Atol protected.
Do I have a refund credit note or a voucher?
Look out for these things on a credit note: the original booking details and original reference number. It’s also important that it details only the amount you originally paid. It should be called a ‘refund credit note’ rather than a voucher. If in doubt, you should contact Abta and ask if you have been issued a voucher or a credit note.
What if I’ve already accepted a refund credit note or voucher?
Tell your holiday provider you’ve changed your mind and ask for a refund instead. If that doesn’t work, it’s better to use the credit note to book a new package holiday as this will at least be Atol protected.
Do I have to accept a voucher from an airline?
No. If your flight has been cancelled by the airline, you are due a cash refund, provided the ticket was booked with an EU carrier or with any airline flying from an EU airport. Until December, EU rules continue to apply to UK airports and airlines. Flight-only bookings have never been Atol protected, so if you accept a voucher and the airline later goes bust, you won’t be refunded.
If your airline continues to refuse a refund you should consider making a Section 75 or chargeback claim through your card provider. Read more about how to use chargeback And Section 75 What should I do if I’ve already accepted a voucher or credit from an airline? Again, tell the airline you’ve changed your mind and want a refund instead. It may not work, but we have seen a few instances where airlines have relented on this.
A spokesman for Airlines UK, which represents UK carriers, said its members are facing “a far longer than usual volume of refund claims to get through”.
He added that the coronavirus lockdown means firms are “not able to bring in additional staff to deal with them”, adding: “We are thankful to passengers for their continued patience.”
Trade association Abta has warned that the deluge of claims caused by the travel industry grinding to a halt means firms will collapse if they are forced to pay out immediate cash refunds.
It wants the Government to allow companies to offer credit notes as a short-term alternative.
An Abta spokeswoman said cash refunds “should be given as soon as possible” but warned that many firms are unable to provide immediate payments because they have not received money back from airlines and hotels.