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Holiday firms told to make cancellation T&Cs fairer

Joanna Faith
Written By:
Joanna Faith

Holiday firms have been urged to check their terms and conditions are fair for customers who need to cancel their travel plans.

The Competition and Markets Authority (CMA)’s ‘Small Print, Big Difference’ campaign encourages businesses to be upfront and clear about charges and fees, especially in the event of a customer cancelling their plans due to changes in circumstances such as an illness or death in the family.

People in the UK spent around £81bn on holidays at home and abroad in the 12 months to April last year.

Under consumer law, businesses may be entitled to ask customers to pay a cancellation fee to cover their losses, but the amount they keep must be in proportion to what they are losing.

Cancellation terms that don’t follow this approach are likely to be unfair and businesses can’t rely on them to resolve claims or disputes with customers, the CMA said.

Rory Boland, travel editor at Which?, said: “Having to call off a long-awaited trip away is bad enough, but it’s made even worse when holidaymakers are forced to hand over large sums of money unexpectedly because the cancellation policy is unfair, unclear or buried deep within the terms and conditions.

“It’s time for travel firms to up their game. If they continue to fail to treat their customers fairly, the CMA should not hesitate to take the enforcement action needed to stop people from getting ripped off.”

Customers treated unfairly

A survey of 2,000 UK adults on behalf of the CMA found that 89% of people felt they should get all, or most, of their money back if they cancel and the business re-sells their booking.

And 85% think it’s unfair if they have to pay part of the cost of a booking when they cancel.

Two thirds (66%) felt that travel and holiday businesses do not always make it as easy to cancel a booking as they should.

Of people with experience of cancelling a booking, 1 in 5 felt that they had been treated unfairly

Examples of unfair terms can include those which allow a business to take a large, upfront deposit and refuse to refund any of the customer’s money if they cancel, regardless of the amount the business is losing or the reason for the customer cancelling.

Another example is when a business insists on a large cancellation fee which bears no relation to the actual losses it experiences from the cancellation.

Paul Latham, director of strategy and communications at the CMA, said: “Nobody wants to cancel a trip or holiday, but if you have to, it’s important that you are treated fairly and don’t lose out more than is absolutely necessary.

“Our campaign is asking travel businesses to ‘check in’ on their terms to make sure they’re fair. Fair terms are a legal requirement as well as helping reassure customers that they’re dealing with a company they can trust.”