Coronavirus: Travellers must have their rights protected, Which? tell companies refusing refunds

Holidaymakers’ money must not be used as a ‘backdoor bailout’ for the travel industry, warns watchdog

(EPA)

Consumer rights must be protected at all costs when it comes to cancelling holidays and flights, Which? has said.

The consumer champion has warned that holidaymakers’ money should not be used as a “backdoor bailout” for the travel industry, after multiple customers reported that companies were refusing to refund them for cancelled trips amid the coronavirus pandemic.

The Independent understands that the transport secretary, Grant Shapps, will protect Britain’s travel industry by agreeing that companies can issue credit notes enabling the holidaymaker to book a new trip within two years instead of refunding them. Any customer who does not redeem the voucher can then claim the sum in cash.

However, Which? is arguing that any change in the rules needs to provide the same protections for consumers so that they are not at risk of losing their money if a travel firm goes bust in the meantime.

Additionally, holidaymakers’ right to claim a refund “must not be taken away retrospectively by any changes to the law,” it said.

At the moment, customers whose package holidays have been cancelled are entitled to a full refund within two weeks of the trip being called off under the Package Travel Regulations 2018.

The European Commission has updated its guidance about refunds for cancelled holidays, encouraging customers to accept vouchers or credit notes, as long as the customer is allowed to ask for their money back eventually.

But British consumers should still be able to request a refund rather than a credit note under current law.

This has not been happening in many instances, according to Which?.

It cited one case in which a customer was refused a refund for his holiday and faces losing £2,300 after only being offered the option of a credit note or rebooking. The well-known beach holiday firm said that, if he decided to cancel, he would have to try to claim the money on his travel insurance.

While Which? said it supports the government exploring options to help the travel industry, it warned that the crisis “should not be used as an excuse to undermine consumer protections” and called package holiday providers that are refusing to issue refunds in expectation that the law might change, “unacceptable”.

Travel association Abta has called on the government to help out the ailing travel industry, while also supporting protections for customers’ pre-paid holidays.

Mark Tanzer, ABTA chief executive, said: “The Package Travel Regulations will continue to protect customers’ pre-payments, as they always have done. But Government intervention is required to enable travel companies to continue to operate through a period of unprecedented crisis, and to provide emergency support to customers.

“Two immediate steps we have asked Government for are to allow companies to refund customers over a defined period, during which their payment is protected, and to establish an emergency fund for customers where travel companies cannot recoup the customers’ money from their suppliers.

“Only with these Government interventions will we be able to continue to protect the customer interests, and avoid a short term run on travel companies which will trigger failures and delay refunds getting to customers.”