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Sykes Cottages U-turns on unfair refund policy

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03/07/2020
Holiday lets firm Sykes Cottages has reversed its policy on cancelled bookings and will now offer customers full refunds after pressure from the competition watchdog.

The Competition and Markets Authority (CMA) said the majority of the 5,500+ complaints it received over holiday rental accommodation providers related to Sykes Cottages.

In particular, complaints centred around Sykes, and its 24 businesses and brands including Pure Cottages Group and Carbis Bay Holidays, refusing to give full cash refunds to customers whose holidays couldn’t go ahead because of coronavirus.

Following an investigation by the CMA, it has now reversed its policy on cancelled bookings and will now offer customers full refunds. If it had not changed its policy, the CMA warned it would have launched court proceedings.

Sykes has also agreed to convert credit vouchers to cash if customers prefer (as long as the credit voucher hasn’t been used) and to provide the CMA with monthly reports on how many refund offers have been made and accepted.

This is the second investigation into Covid-19 cancellation policies by holiday letting companies after Vacation Rentals last month agreed to offer refunds for all trips which could not go ahead due to the pandemic, following CMA action.

‘Doing the right thing’

The CMA continues to keep oversight of businesses when it comes to their treatment of customers during the pandemic. It said a number of firms have voluntarily changed their behaviour and are now “doing the right thing”. But others are still not providing refunds to consumers and risk further action from the CMA.

Andrea Coscelli, CEO of the CMA, said: “Our Covid-19 Taskforce has received thousands of complaints about holiday rental firms, so it’s good to see our action bringing results for consumers. Sykes is the second major holiday lets company to change its Covid cancellations policy by offering full refunds following CMA intervention. We expect all companies to do so.

“As lockdown restrictions lift, consumers are still having to recoup their losses from cancelled holidays, which increases the financial worries which many people face. The CMA has shown it will act to protect consumer rights and enforce consumer law. Businesses must now do the right thing or risk similar enforcement action themselves.”

Graham Donoghue, chief executive of Sykes Holiday Cottages, said: “The last few months have been some of the most stressful for UK holidaymakers and most challenging for the sector’s agents and operators.

“Whilst the majority of customers with bookings starting during the current lockdown period have successfully rearranged their holiday to a later date, we recognise that not all those have been able to or wanted to. Throughout June, more than 5,000 customers have received a full refund.

“Like many parts of the leisure industry, we have worked with the CMA, but the wheels were in motion on this before they got in touch.”

CMA’s Covid-19 Taskforce figures

Separate figures from the CMA’s Covid-19 Taskforce revealed that from 10 March to 28 June 2020, it had been contacted more than 80,000 times about coronavirus-related issues.

Since mid-April, 70–80% of complaints received related to unfair practices when it came to cancellations and refunds. Consumers continue to raise concerns about firms refusing to provide refunds; introducing unnecessary complexity into the process of obtaining refunds; charging high administration or cancellation fees; and pressuring consumers into accepting vouchers instead of cash refunds.

Across all cancellation and refund complaints, the average amount at stake is £800. For cancelled weddings, the average is £3,200, and for holidays it is £1,000.

While the volume of complaints about high prices remains at low levels (an average of 11 per day in June, down from 76 in April) the CMA said it remains vigilant to the risks of “unjustifiable price rises”.

It added it has written to 277 firms about price rises for essential products, accounting for over 4,600 complaints: over 40% of the total number of actionable complaints received about price rises.

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