You are here: Home - Household Bills - News -

Watchdog threatens action against airlines over poor refund process

Written by:
The Civil Aviation Authority (CAA) is reviewing the refund policies of all UK airlines and warns it will take enforcement action where it finds they’re making the process difficult for customers.

The aviation regulator is reviewing the refund policies of 18 UK airlines and a number of international airlines which operate flights to and from the UK.

As part of the review which began in May, the CAA said it doesn’t expect airlines to systematically deny consumers their right to a refund, though it does support airlines offering vouchers and rebooking alternatives “where it makes sense for the consumer”.

Airlines have been reminded they must provide cash refunds to passengers who request this where a flight has been cancelled. And given its spotlight on the sector, it is considering whether any further action needs to be taken to protect consumer rights.

It comes as the review found a number of airlines are paying refunds quickly and don’t have a big backlog of requests. While regulations state refunds should be paid within seven days of the request, the CAA said there are “operational challenges” which make this difficult to meet. It will continue to monitor these airlines.

It placed a number of airlines into a ‘requiring transparency improvements’ group. This was based on customer complaints where the airlines did not appear to be providing refunds at all. After contacting the airlines, it said a number have introduced new systems for processing refunds though added more work needs to be done to inform passengers they’re entitled to a refund.

The CAA said: “We will allow these airlines a short period to make the necessary improvements before we reach a definitive view on their performance.”

Its final grouping – ‘requiring processing time improvements’ – the CAA included airlines with substantial backlogs which “are taking too long to process refunds”.

It said this group includes some major carriers and they have been asked to provide commitments to speed up the timescales.  The CAA said where performance doesn’t improve, “it will not hesitate to take enforcement action”.

A statement by the CAA, read: “Only a minority group of airlines have been consistently providing consumers with refunds in an acceptable timeframe, however we have noted a marked improvement across most airlines since our review commenced. We expect this direction of travel to be maintained.”

‘Airlines breaking refund law for months’

Rory Boland, editor of Which? travel, said: “This update from the regulator confirms what we have been highlighting to it for months – that airlines are continuing to disregard the law and withhold huge sums of money from their passengers during a time that has placed incredible stress on people’s financial and emotional wellbeing.

“The time for monitoring and performance reviews has long passed. Airlines have been breaking the law on refunds for months, and to delay action for any longer goes against the regulator’s claims to be on the side of consumers. We need to see urgent enforcement action to hold airlines to account, set a higher standard for the months ahead, and demonstrate that there are real consequences to breaking the law on refunds.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

It’s time to get your finances in shape, and moving your cash savings to a higher paying deal is a good plac...

Everything you need to know about being furloughed

Few people had heard of ‘furlough’ before March 2020, but the coronavirus pandemic thrust the idea of bein...

The experts’ guide to sorting out your personal finances in 2021

From opting to ‘low spend’ months to imposing your own ‘cooling-off period’, industry experts reveal t...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week