With flights, accommodation, tours and holiday plans disrupted due to the coronavirus pandemic, consumers are expressing increasing frustration as holiday companies appear to flout consumer protection laws by refusing to offer refunds.
While some airlines, hotels and tour operators are approving refunds, albeit reluctantly, others are making it difficult to request refunds, with some refusing refunds altogether requiring consumers to take a credit note or to rearrange their booking.
While holiday companies try to retain cash from sales and stem losses caused by the pandemic, their actions are illegal and go against consumer protection laws.
What the law says
If a flight is cancelled, the airline has to offer the consumer a refund. The Civil Aviation Authority (CAA) states explicitly that “If your flight has been cancelled, your airline must offer you the choice of a refund or alternative flight.”
In the current circumstances, however, airlines are failing to follow the rulebook, and the CAA has yet to act in enforcing the rules.
Some airlines, such as easyJet, have removed the refund option from their website, obliging those who don’t want to reschedule to call the helpline, which remains extremely busy.
British Airways refers only on its website to rebooking or claiming a voucher, and not to claiming a refund.
Ryanair is issuing vouchers with a 12-month validity, and is refusing to process refunds until after the pandemic.
Irish airline Aer Lingus has taken the most consumer-friendly approach, but still falls short of the usual rules. It has offered its travellers a 10% bonus if they take up the voucher. The voucher lasts five years and is transferrable to other individuals without penalty.
There may be further issues as consumers look to cash in their vouchers, whether restrictions will apply and if the airline will still be around in the future.
Consumers are advised to insist on a refund wherever possible, and to consider alternative options, for example, if your flight cost more than £100 and was booked using a credit card, you can hold the card provider jointly liable.
If your holiday has been cancelled by the tour operator you should get a full refund within 14 days. With firms struggling to meet this two-week period due to cashflow difficulties, tour company body Abta has called on the Government to allow firms up to four months to process refunds.
If the tour operator collapses before it is able to compensate you, you can claim under the government-backed Atol scheme. The scheme will also continue to cover those who elect to switch their trip to a later date.
Airbinb has been offering both owners and those with reservations the chance to cancel without incurring fees.
Reservations for stays and Airbnb Experiences made on or before 14 March 2020, with a check-in date between 14 March 2020 and 31 May 2020, are covered by the policy and may be cancelled before check-in.
UK holiday rental bookings do not enjoy the same level of protection as a package holiday. They are not protected by the Package Travel Regulations which entitle customers to refunds if their holiday is cancelled.
As a result, many UK cottage owners and agents are refusing to refund, either offering credit notes or requiring consumers to change their booking for the same property, but at a higher rate and with a rearrangement fee. They are allowed to do this as the cottage still exists and is still being offered.
Agents are also arguing that customers’ contracts are with the individual property owner, rendering them helpless.
Usually, if a contract becomes impossible to perform, or can only be performed illegally, it is considered “frustrated”. The threat of legal action to reclaim denied payments may be enough to force a refund, but you may have to go to court to get the money back. In some cases, the rental contract may also contain a clause excluding the agents and owners of liability if a contract is frustrated because of events beyond their control.
It is worth checking your travel insurance policy in case it covers UK-based holidays.