By Victoria Mckeown-
Travel package companies will today send a letter from the Competition and Markets authority (CMA) to remind them of their conduct towards customers.
Over 23,000 complaints have been received by the CMA this year with respect to lost money due to lost money due to lost holiday money.
Last February, the CMA issued Lastminute.com a letter before action for failure to comply with the undertakings it gave to the CMA by failing to pay customers entitled to a refund for their cancelled package holidays by the deadlines agreed, in breach of the Package Travel Regulations 2018.
It also opened n investigation into Teletext with regards to its failure to protect customers under consumer protection law.
Customers have been trying to cancel their holidays and claim refunds after the travel industry came to an abrupt standstill as a result of the pandemic.
The effects of job losses and survival of many employees on furlough on top of redundancies caused by the pandemic, have meant that many families being so desperate for their holidays to be refunded to pay their bills as they their income has dropped so dramatically.
Consumers have a right to cancel their holiday and receive a full refund within 14 days if, due to circumstances beyond its control, their holiday is affected. However unscrupulous operators have been persuading customers into taking vouchers towards alternative holidays.
In the strong and comprehensive letter, the CMA warns operators that if they continue to receive complaints indicating consumer law breaches, and companies to not honour customer rights then they would be prepared to take these companies to court.
Tour operators have become financially and operationally challenged due to the impact of the coronavirus COVID-19 outbreak. The travel industry is set to loose £37bn this year alone, according to VisitBritain.
The CMA said that consumers in relation to contracts that have been terminated as a consequence of the pandemic (by either the organiser or UK consumers).
The CMA’s review of those complaints indicated that a number of companies had breached their refund obligations under the Package Travel and Linked Travel Arrangements Regulations 2018 (the ‘PTRs’).4
Additionally, the complaints indicated that some companies were providing inadequate or misleading information to consumers about their statutory rights under the PTRs, that refund processes were not transparent or were difficult to follow, and that there was a lack of information about the risks, and terms, associated
with alternative options offered to consumers instead of a full refund.
Further, the complaints indicated that some companies were imposing unnecessary steps or procedural barriers which delayed or prevented consumers from getting the refunds to which they are entitled within 14 days.
The CMA said that this was not an exhaustive list of the practices consumers have complained about, but that it considers that practices of this nature are likely to breach the
Consumer Protection from Unfair Trading Regulations 2008 (the ‘CPRs’).5Action required
It called on travelling companies to check that your practices and policies are in line with the requirements of consumer protection law.
It said that in addition to the consumer complaints received during our investigations, the CMA has reviewed a range of communications from various organisers to consumers. This has included information provided on websites.
It pointed out that Regulation 14 of the PTRs, imposes a statutory requirement in certain circumstances to provide refunds without
undue delay and in any event not later than 14 days from termination.
Prevalent Complaints
The majority of complaints the CMA received had to do with concern about consumers being denied their PTRs’ right to a full refund without undue delay .
The complaints showed that some consumers were automatically issued with vouchers and RCNs instead of being offered the option of a full refund.
Other consumers complained they were denied a full refund of their deposits or were charged cancellation fees when exercising their statutory right to terminate a package holiday contract in circumstances where they appeared to have had a right to a full refund.
The CMA said that organisers are expected to offer the consumer a right to cancel and receive a full refund within 14 days if, due to circumstances beyond its control, the organiser needs to alter significantly any of the main characteristics
of the package.
It pointed out that the refund is a statutory right under regulations
11(4), 11(5)(b) and 11(8) of the PTRs. have robust processes in place so that when a package holiday is cancelled by the organiser under regulation 13, or the consumer when they are exercising their rights under the regulations.
Consumers Right To Cancel Package
It added that the consumer may cancel a package travel contract
without incurring a termination fee (and is therefore entitled to a full refund) where there are ‘unavoidable and extraordinary
circumstances at the relevant destination or its immediate vicinity
which significantly affect the performance of the package.
It recommended that the option of a full refund is clearly and prominently disclosed to consumers in the information it provides to consumers on its website (and through social media) about the options available to them when the organiser cancels, or needs to alter significantly any of the main characteristics of the package.
The CMA further emphasised that it would typically expect the
option of a full refund to be no less prominent than any other option contained in such information.
The government regulator said its investigation noted that some travelling companies were failing to provide refunds to consumers unless and until they had themselves received back the payments they had made to airlines or accommodation providers.
However, the fact that an organiser has not itself been refunded
by third parties does not in any way relieve organisers of their duties under the PTRs.
Organisers are legally obliged to refund consumers in these situations, irrespective of whether funds are first received back from third party service providers.
Opening Up Of Holidays
Holiday travel opens up from next Monday, however most destinations will require quarantine on either side of the destination. Portugal is the only country at the moment on the “Green List “however there concerns that this could change at any minute.
ABTA recommends travellers to book a package holiday as these provide the best form of protection under the Package Travel Regulations.
Where consumers terminate their package due to FCDO advice against travel to their holiday destination or its immediate vicinity around their travel date based on health risks and general consequences resulting from the presence of COVID-19
there, customers are likely to be entitled to a full refund under regulation 12(7)-(8) of the PTRs.
In particular, in the CMA’s view, the mere fact that the flight is still operating, and the accommodation is open is not, in and of itself, a sufficient basis to deny a consumer a full refund.
Reasonable Expectations
This is because the CMA considers that organisers need to take into account the consumer’s reasonable expectations of the package taken as a whole when determining whether a right to a full refund has arisen, including expectations as to safety, enjoyment and freedom from anxiety.
Andrea Coscelli, chief executive of the CMA (picured) , 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 have 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.”