The UK’s 20 biggest travel operators and airlines are openly breaking the law by delaying refunds for cancelled trips or removing customers’ refund rights altogether, new research by Which? has found.
The consumer champion has received thousands of complaints and requests for help from people struggling to secure a refund for their cancelled travel.
Some airlines and package travel providers are refusing to provide refunds, in a breach of their legal obligations to their customers, while others are providing vouchers or credit notes – which may prove to be worthless if holiday firms run into financial trouble.
Up to £7 billion in payments made by UK customers – many who may also be struggling financially due to the impact of the pandemic – are affected, according to the travel industry’s own estimates.
The travel industry is facing unprecedented strain as a result of the coronavirus pandemic, which has left many firms unable to pay out refunds on such a large scale within the legal time frame without risking going out of business.
Which? is today launching a 10-point plan to maintain trust in the travel industry and warning that without swift and tangible government action, consumer confidence in the travel sector could be permanently damaged.
The practical measures in the plan, which would help the industry and protect holidaymakers, include protecting consumers’ legal right to cash refunds, extending Foreign Office travel warnings to a definitive date, establishing a temporary government travel guarantee fund, and ensuring travel insurance terms and conditions are more transparent.
As part of its research, Which? contacted 10 of the UK’s biggest holiday companies, including TUI and Jet2, and 10 of the UK’s biggest airlines, including British Airways and easyJet, to establish if they were offering customers cash refunds for cancelled travel plans, and if so, under what circumstances.
It found that none of the UK’s 10 biggest holiday companies are currently offering full refunds within the legal time frame, with some refusing to provide refunds altogether and instead offering customers the choice of rebooking or accepting a voucher or credit note.
Loveholidays has come under fire for telling customers they would only be able to accept voucher credit for their cancelled holidays, and would not be processing refunds any time soon. TUI, the world’s largest holiday company, was also criticised for not proactively offering refunds after cancelling holidays on mass, but amended its policy after Which? highlighted its approach.
A few companies are bucking the trend, showing that it is possible to treat customers fairly and operate within the law amid the coronavirus outbreak. Trailfinders, Kuoni, Responsible Travel, Explore Worldwide, Llama Travel, Mountain Kingdoms, Friendship Travel and Vivid Travel are some of the companies that customers have said are processing refunds as normal, with a number of customers contacting Which? to praise their handling of the disruption.
On the Beach is also issuing cash refunds, although these are taking longer than the legal time frame as it will only pay the airline element of the refund when it receives this from the carrier.
The Package Travel Regulations currently state that customers whose package holidays are cancelled by the tour operator in these circumstances should receive a full refund within 14 days of the cancellation. Confusingly, ABTA is advising travel operators that customers may be offered a ‘refund credit note’ instead of an immediate cash refund, despite the Package Travel Regulations not having been amended in light of the current coronavirus crisis, and remaining legally binding.
Which? also contacted 10 of the UK’s biggest airlines and found none are refunding passengers who have had flights cancelled within the legal time frame, with one airline refusing to process refunds at all. Under the Denied Boarding Regulations, if you’re due to fly with an airline based in the UK or EU, or are flying from an airport in the UK or EU, you’re protected if your flight is cancelled, and should be refunded within seven days.
Frustrated customers have told Which? of how airlines are making it near impossible to contact them to find out if they will be refunded, with some having to resort to attempting to claim their money back from their card provider.
Steven D’Hoe, 46, from Herefordshire, told Which? he has had to resort to making a Section 75 claim with his credit card provider after Air France-KLM confirmed it would not refund him for his cancelled flights. Mr D’Hoe explained to the airline that he is self-employed and needed the money to pay for bills and food while he has no income, but told Which? that the airline would not budge.
Despite Ryanair initially being praised for its decision to refund customers, Which? has seen customer complaints that the airline is now asking them to accept a voucher valid for 12 months, or to join a refund queue and wait for their money back until the coronavirus outbreak has passed.
Meanwhile, British Airways passengers have complained to Which? about being unable to complete a refund form online, and instead being directed to a phone line where they are often unable to speak to someone due to high call volumes.
Richard Lartey, 27, from London, told Which? he has been waiting over a month for his money to be returned for a cancelled BA flight, and of his frustration in trying to claim a refund from the airline.
Richard, who was due to fly to visit his pregnant partner in Austria, said: “The only option for a cash refund is to call up. Instead of holding customers in a queue the telephone system would simply hang up after playing a short message.”
BA has told Richard that his money will be returned, but he has yet to receive the money back.
Which? recognises the travel industry is under huge strain, and would encourage holidaymakers to rebook if it suits their circumstances – but the government must first provide clarity about how customer money will be protected in these circumstances.
Which? has set out clear steps the government can take to support the industry and help it through this challenging period in its 10-point plan.
The government must now work with regulators and the industry to implement these measures – to ensure that passengers who are unable to travel due to the coronavirus pandemic are not left out of pocket, that the damage caused to the sector so far is not permanent, and that consumer faith in the industry is restored.
Rory Boland, Editor of Which? Travel, said:
“We have been inundated with messages from desperate travellers, some who are thousands of pounds out of pocket as a result of cancellations and have no idea if or when they’ll see their money again.
“We do not want to see the industry suffer further as a result of this outbreak, but it cannot be on consumers to prop up airlines and travel firms, especially when so many will be in difficult financial situations of their own.
“The government must urgently set out how it will support travel firms and airlines to ensure they can meet their legal obligations to refund customers for cancelled travel plans – and avoid permanent damage to trust and confidence in the travel industry.”
