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Travel firms warned over refunds ahead of summer trips

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Written by: Emma Lunn
14/05/2021
The Competition and Markets Authority (CMA) has warned package holiday companies to respect the refund rights of holidaymakers ahead of the summer period.

The regulator published an open letter to the sector and has also sent it directly to the 100 package travel firms with the most complaints about them. The letter reminds the firms of their legal obligations and of the need to ensure refund options are clear and accessible.

As a result of CMA action, Tui has now given a formal commitment – known as ‘undertakings’ – to provide clearer information on refunds upfront to customers whose holidays have been cancelled due to Covid-19.

The company had already taken steps to meet concerns raised by the CMA, by improving the information it provides to customers and making it easier for people to get their money back.

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.

Its letter to the package travel sector sets out what businesses should provide and what customers can expect.

Holidays cancelled by package holiday companies must be refunded within 14 days under the Package Travel Regulations (PTRs). Any offer of a refund credit note must be accompanied by the option of a full refund. Customers should be able to exchange their credit note for a refund at any time.

People have a right to a full refund where they decide to cancel their package because ‘unavoidable and extraordinary circumstances’ at the destination significantly affect the holiday they have booked or their travel there.

The CMA says that if the Foreign, Commonwealth and Development Office (FCDO) is advising against travel to a particular package holiday destination it would count as ‘strong evidence’ that these unavoidable and extraordinary circumstances are likely to apply.

If the consumer is refused a full refund, the package holiday company should fully explain why it disagrees that the holiday or travel is significantly affected.

Andrea Coscelli, chief executive of the CMA, said: “International travel is set to resume soon and lots of people will be considering a long-awaited trip abroad. With that in mind, we want to make sure people are fully aware of their refund rights, so they can make informed choices about booking a holiday.

“We’ve secured millions in refunds for people who couldn’t go on their hard-earned trips over the past year and now 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: “With international travel set to resume, we must not see a repeat of the fiasco that took place last year, which saw some travel firms break the law by withholding refunds from customers for months after their trips were cancelled.

“Earlier this month Which? revealed that some of the UK’s largest holiday companies were suggesting they may break the law again this summer. It’s encouraging that the regulator has set out its expectations of firms, and it must take strong action quickly against operators that drag their feet on refunds or mislead customers over their rights.

“Travellers considering a holiday this year should only book with companies that guarantee in their flexible booking terms that they will be able to give full refunds if a country is moved from the green list to amber, or if lockdowns, quarantine or other disruption prevents them from travelling.”

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