Travel firms warned ‘to respect the refund rights of holidaymakers’

The option of a full refund must be ‘clearly and prominently offered’ when a trip is cancelled

Opening up: Ponte Vecchio in Florence (Simon Calder)

Days before overseas holidays are permitted once again, travel firms have been warned that they must follow refund rules when trips are cancelled because of coronavirus.

The Competition and Markets Authority (CMA) has written to the 100 most-complained-about package travel firms to remind them of their obligations.

Since March 2020, the CMA has received more than 23,000 complaints from consumers about refund issues relating to package holidays that could not go ahead due to the pandemic.

When a package holiday is cancelled, the customer is entitled to a full refund within two weeks under the Package Travel Regulations.

The authority says “a number of companies had breached their refund obligations”. Some complaints indicated companies were providing inadequate or misleading information to consumers about their statutory rights, the CMA also said.

International leisure travel from the UK has been illegal for the past 18 weeks. Starting on Monday 17 May, overseas holidays will be permitted once again.

The letter from Hayley Fletcher, director of the Consumer Group at the CMA, said: “Some organisers were making the receipt of vouchers a requirement before the consumer was able to request a full refund or, in one case, the organiser prohibited consumers from being able to use those vouchers to request a full refund before a specified date in the future.”

The letter to travel firms says: “The complaints indicated that some companies were imposing unnecessary steps or procedural barriers which delayed or prevented consumers from getting the refunds to which they are entitled within 14 days.”

The CMA warns that the option of a full refund must be “clearly and prominently offered” when holidaymakers are told their trip has been cancelled.

It also says that tour operators – the companies putting together flights and accommodation – cannot delay refunds until they get cash back from airlines.

“The fact that an organiser has not itself been refunded by third parties does not in any way relieve organisers of their duties,” the letter says.

When Foreign Office (FCDO) travel advice warns against travel to a destination, the customer is entitled to cancel and get all their money back, the CMA says.

The letter warns: “Where consumers terminate their package because around their departure date there is FCDO advice against travel to their holiday destination or its immediate vicinity based on health risks and general consequences resulting from the presence of Covid-19 there, they are likely to be entitled to a full refund.

“The mere fact that the flight is still operating, and the accommodation is open is not, in and of itself, a sufficient basis to deny a consumer a full refund.”

Andrea Coscelli, chief executive of the CMA, said: “We’re calling on package holiday companies to make the refund process less hassle in the future.

“We expect all firms to give clear cancellation options and will consider appropriate steps if we see companies breaking the law by refusing or delaying refunds this summer.”

Rory Boland, editor of Which? Travel, said: “It’s extraordinary that a regulator feels it must warn 100 firms not to break the law, but it reflects how poorly many travel firms have acted.

“Naming the 100 would be useful. Consumers can avoid them, and makes it clear the problem is not industry-wide.

Julia Lo Bue-Said, chief executive of Advantage Travel Partnership, said: “I think it also reflects a system that the pandemic broke. My team worked tooth and nail to help my members – human travel agents – in fighting for 100 per cent refunds for their customers.

“Many paid out of their own pocket even when they had passed on the original payment to the provider.”

Britain’s biggest holiday company, Tui, has given a formal undertaking to give clearer information about refunds.