Watchdog to investigate travel firms over refusal to refund holidays

The Competition and Markets Authority (CMA) has seen increasing number of complaints in relation to cancellations and refunds.

It has said that these now account for four out of five complaints being received into the Taskforce and so far include concerns about businesses refusing refunds or firms pressuring people to accept vouchers for holiday accommodation, which can only be used during a more expensive period.

Based on the complaints received, the CMA has identified 3 sectors of particular concern:

• weddings and private events
• holiday accommodation
• nurseries and childcare providers

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.

For most consumer contracts, the CMA would expect a full refund to be issued where:

• a business has cancelled a contract without providing any of the promised goods or services
• no service is provided by a business, for example because this is prevented by the restrictions that apply during the current lockdown
• a consumer cancels or is prevented from receiving the service, for example due to the restrictions that apply during the current lockdown

Andrea Coscelli, CEO of the CMA, said:

“Our Covid-19 taskforce is shining a light on some of the big issues facing consumers in wake of this pandemic. Alongside price-gouging reports, we’re now seeing cancellation issues in their thousands. So far, the CMA has identified weddings, holiday accommodation and childcare as particular areas of concern.

“The current situation is throwing up challenges for everyone, including businesses, but that does not mean that consumer rights can fall by the wayside. If we find evidence that businesses are failing to comply with consumer protection law then we will get tough – that means launching enforcement cases and moving to court action where there is a strong reason to do so.”