Many consumers continue to experience difficulties in obtaining refunds for travel cancelled due to Covid-19, despite intervention and encouragement by several consumer bodies for eligible consumers to be refunded in a fair and timely manner. Positive progress has been made in this area for many consumers, however there are still those awaiting part or full refunds from travel providers so many months down the line.
In the six months between April and September, approximately 41% of consumers contacting consumeradvice.scot were doing so in relation to travel issues. 46% of these consumers highlighted that their difficulties were in relation to travel that had been cancelled by the travel provider due to lockdown restrictions and international travel bans.
Although the peak of these enquiries was in the summer months, a number of consumers continue to report ongoing issues with refunds they are still owed by travel providers to this day.
CMA intervention
In October, after an investigation by the Competition and Markets Authority (CMA), Virgin Holidays agreed to a set of formal commitments (or ‘undertakings’) to ensure all affected customers receive money from refund requests without undue delay, specifically –
- Repayment by the 30th October 2020 for holidays cancelled before the 1st September 2020
- Repayment by 20th November 2020 for holidays cancelled between the 1st of September and the 21st October 2020.
- Repayment within 14 days for holidays cancelled on or after 1st November 2020.
The holiday giant has received 53,000 refund requests since the 1st March 2020 and have formally agreed to repay consumers by the dates outlined, and the CMA have advised that they are prepared to take the company to court over this if these timeframes are not met.
Additionally, the CMA wrote to another 100 holiday firms, reminding them of their requirement to comply with consumer protection laws, with some of these firms already making positive commitments in response.
Additional Protections
Following pressure from Which?, the Government confirmed that credit notes for air-based packages (to 31st December 2020) will have the same protections granted as the holidays that they replace, meaning that if a holiday provider enters administration, customers will be protected by the ATOL scheme.
This does not mean that consumers are required to accept the offer of credit notes from holiday providers and can still request a cash refund. Different circumstances have to be taken into consideration in relation to entitlement to refunds for travel.
As a reminder, your consumer rights vary depending on the circumstances of your booking –
Flights as part of a package holiday
Entire cost of the holiday will be refunded. This is happening automatically for some consumers, but consumers can contact the company that they booked through for further clarification.
Flights and hotel booked separately
Consumers are advised to contact their hotels, requesting a refund/change in dates. Many airlines are allowing passengers to change dates of flights without additional fees in instances where tougher travel restrictions have been imposed on specific areas.
In situations where the hotel and location are open, and the booking is non-refundable, then travellers may lose out.
Travel Insurance policies
Consumers are urged to check the specifics of travel insurance policies that they have taken out. These may offer financial compensation in situations where other means do not.
If consumers have arranged travel to affected areas after a warning was issued in the area, then there is a risk that any insurance policy may be invalidated by this. Consumers are urged to check the details of their insurance policies and if at all unsure and contact their insurance company directly for more information.
New travel insurance policies
Considering recent events, many insurance companies have ceased selling new travel insurance policies and, in some circumstances, have changed levels of cover because of the coronavirus pandemic. The Association of British Insurers has stated that travel insurance is a product meant to be used in unforeseen circumstances, and due to the current situation, issues arising because of coronavirus are no longer deemed ‘unforeseen’.
Already abroad and no means of getting back to the UK
In circumstances where local lockdown restrictions and changes to flights occur, airlines have a duty of care to those passengers abroad if a return flight is cancelled. The airline should also pay for any additional charges for accommodation and any food required. For those consumers who have accepted a refund, then the duty of care ends here. It is then the responsibility of the passenger to arrange travel back to the UK.
In situations where none of the above are possible, or where consumers feel stranded, they are advised to contact the embassy in their current location to seek further assistance. Specific embassy locations can be found by visiting www.gov.uk/world/embassies and searching based on your destination.
Consumers choosing to cancel their travel plans
If there has been no warning issued in relation to the destination of choice, and the consumer chooses to cancel their plans, then there is no automatic right to compensation.
An alternative to this may be discussing postponing the date of travel with the travel provider, as many are offering to do this free of charge for consumers.
Problematic travel providers
In an instance where travel has been cancelled by the provider, and obtaining a refund continues to be problematic, consumers still have the same consumer rights as they would at any other time.
You should start by making a formal complaint to the travel company and advise that you are not willing to accept a credit note or voucher. You should advise that you believe that the length of time you have had to wait for a refund is unacceptable and that you are legally entitled to this.
Complaints that are not responded to or resolved within 8 weeks can usually be escalated through Alternative Dispute Resolution (ADR). This is where a third party (usually the ADR scheme that the provider is registered with) mediates and attempts to reach a reasonable solution for all parties.
Consideration of the method of payment used for booking the travel should be made. Consumers who have booked travel on a credit card over the value of £100, may be able to claim a refund through Section 75 of the Consumer Credit Act. This protection means that the card provider becomes responsible ‘jointly and severally’ for the purchase, meaning that if the travel provider is refusing to pay out, the card provider will have to. Chargeback schemes are another alternative if payment has been made through debit card.
In both sets of circumstances, you should contact the card provider or bank to request this. They may require you to have gone through all the logical steps to obtain the refund directly from the travel provider in the first instance and may request proof of this. You can use emails as proof of ongoing dialogue with the travel provider (or lack thereof).
If you are experiencing ongoing issues in obtaining refunds for travel cancelled by the provider, you can contact a consumeradvice.scot specialist adviser for more information, including template letters that can be used to contact the travel provider.
Our specialist advisers can be reached on 0808 164 6000. We are open 9am-5pm, Monday-Friday.
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