During the current crisis, most businesses are doing the right thing when it comes to refunding consumers affected by cancellations.
For example, I had tickets booked for a charity comedy night full of A-list comedians and waited for news about the event. I was interested to see if they could reschedule (highly unlikely given all the names involved) and whether they would ask if I would like to make a donation to the charity. In fact, I received an email to say they were looking to reschedule a number of events and, soon after, received an email listing all the dates that were cancelled and those that were rescheduled. Ours was, of course, cancelled. The refunding of the card was already underway, according to the email.
However there are a number of companies still not doing the right thing. For example, those which are trying to give credit notes instead of cash refunds.
Whilst even I would say to allow companies a little extra time to give you that refund (and I would normally NEVER say that!) due to the amount of refunds that they are having to be processed, your consumer rights remain the same in all circumstances whether they are COVID-19 related, or not.
The crisis has hit nearly every sector. There is some support for many businesses, so it is not right for the consumer to bankroll these companies and also be out of pocket.
Report businesses acting illegally during the pandemic
The Competition and Markets Authority (CMA) is closely monitoring businesses through this period. It has the power to open a consumer enforcement if it finds strong and compelling evidence that the law might have been broken. It can call on the company to change their behaviour by committing to formal undertakings or promises. If they refuse, then the case can be taken to court. It won’t take on individual cases but it is worth reporting any offending companies to the CMA.
The CMA is also monitoring price hiking (also known as “gouging”) and will similarly tackle companies that are attempting to profit from the current situation.
Unused gift vouchers during Covid
Normally there are restrictions on gift cards. Will your Gift Cards keep on giving? However, many people have not been able to use their gift cards in store while shops are shut. If the gift card could have been used online then you should use it online. You would expect companies to extend the gift card deadline in these cases where the cards can only be used in store because they have not been able to provide normal service. However due to the unprecedented nature of the reason that you have been unable to spend the card it is yet to be tested in court which is, ultimately, the test.
Coronavirus and price hikes
Help with getting the refund you are owed from business
Ceoemail.com is a site which gives you the contact details for CEOs. The CEO may not respond personally but it does get the matter escalated and you should get a response from one of the executive team.
Covid – who is doing what and what are your rights?
It would be hard to find anyone not negatively affected in some way by the Coronavirus. Many people have seen their long saved for holiday plans disappear overnight. And many of these people are voicing their dissatisfaction with the poor response from their airlines.
Airlines – what are they doing about refunding?
Airlines are, in some cases, offering only credit notes and vouchers and at best saying that if, after the deadline of the credit note, customers want a refund then they can have one. But for many people this simply isn’t acceptable. They may now need the money to keep afloat as they can’t work, or it was going to be their last ever holiday etc. You are legally entitled to a full refund under the Flight Compensation Regulation, (EC) No 261/2004, and under IATA regulations for companies which are IATA members.
Whilst I accept that here may be a delay in administering refunds because of the huge increase in the amount of claims, I do not accept that airlines should try and get out of their legal duty.
What does the law say?
Under The Package Travel and Linked Travel Arrangements Regulations 2018 you are entitled to the full refund within 14 days. But tour operators are struggling because they have not received their refunds from airlines and hotels. If they refund in full, with no incoming cash flow, they will go into administration and many consumers will not get their money back.
ABTA has said…
“The rules around 14 day refunds were never designed for the mass cancellation of holidays, which is why we are asking for more time for travel businesses to fulfil this requirement – customers will not lose their right to a refund, and their money is not at risk.”
Some companies are giving cash refunds, where possible. ABTA is working with Government as it looks for support and assistance to protect both businesses and consumers. It wants to strengthen the regulatory basis and extend the window for Refund Credit Notes. The European Commission has already relaxed its position on the regulations, and as a result many other EU countries including France, Italy, Belgium, Spain, Germany, The Netherlands and Denmark have taken action to amend their laws and/or provide additional guidance as a result of the crisis. The UK Government has yet to do anything in this regard.
ABTA is recommending that businesses offer and consumers accept a Refund Credit Note. This would, in effect, work as an IOU and the company should then refund in full (if the consumer does not want to rebook). It has said these should be dated up to 31st July 2020.
ABTA says “Strengthening the regulatory basis and extending the window for Refund Credit Notes, as a short-term alternative to cash refunds, will provide businesses with vital breathing space, whilst ensuring all consumer protections are carried forward.”
An ABTA spokesperson told me “While this unfortunately involves a delay for consumers receiving their money back or booking a replacement holiday arrangement, the alternative scenario is travel company failures and customers waiting even longer to receive their money.”
Some companies are incorrectly interpreting ABTA’s suggestions as guidelines. For example, the LoveHolidays website states “In line with ABTA guidance, for customers who have had ATOL-protected holidays cancelled due to the global Coronavirus outbreak, we are issuing an ATOL-protected refund credit note.”
The crisis and airlines attitude has indeed caused a number of other businesses and freelance travel consultants to be out of pocket and go into administration.
Linda Reynolds, a freelance personal travel agent, is currently working for no income. She is spending all her time trying to help her clients with refunds. She will actually end up not only losing all her income but possibly owing it too. This is because she receives commission for holidays one month prior to travel that is now no longer taking place. Where possible she is refunding what she can and trying to get airlines to honour their legal duty. She says to consumers wanting to get their money back from travel agent to “Please bear with us. Small companies are going bust trying to do the right thing. We often can refund part of the package but are waiting on the airlines who are refusing to give refunds.”
ABTA Chief Executive, Mark Tanzer, said “These are unprecedented times in the travel industry, and for the sector to come through it is vital that all parts of the chain respect their obligations. Governments have rightly identified the aviation sector as requiring emergency support, but funds provided must find their way to the passengers and corporate partners of the airlines – tour operators and travel agents – as the problem has moved down the chain. This is to the detriment of customers and the whole travel and tourism sector, at a time when co-operation is essential.”
Where is the airline regulator, CAA in all of this?
The Civil Aviation Authority (CAA) is the regulatory body for airlines. When approached for comment regarding what it would do to ensure that airlines abided by the law, it referred me only to its website where the advice has not changed for some time and does not address the issue of airlines not providing refunds in full.
When pushed for what action it was taking to address the problem, a CAA spokesperson simply said “If an airline cancels a flight they are legally obliged to refund the customer.” Numerous requests for details on any action it will take and if vouchers will be covered if the airline goes into administration have gone unanswered.
An ABTA spokesperson said: “We continue to stress in our discussions with the CAA, as the relevant enforcement body, that airlines are obliged to refund under Regulation 261 and under IATA regulations for IATA members.”
It would appear that airlines are making it deliberately difficult for companies to gain refunds with relevant bodies taking little to no action. JetSet holidays provides services to travel agents. It too is having to hold out on paying agents as airlines aren’t refunding properly. John Bond, the JetSet Holidays CEO, has said it will do whatever it can to help agents. “Unfortunately many airlines are now asking for manual refunding which are sent offline to their offices, which by nature normally get looked at individually usually within 4-6 weeks. However, as airlines have probably furloughed 80% of staff, we can only imagine how long that refund will take to process!
“This has increased the workload and difficulty as many agents have closed their offices and further delays refunds in trying to contact each client.”This payment process is cumbersome and designed to delay the process of getting the money back to the customer. He continues; “We would like all airlines to refund cancelled bookings in the usual automated manner through BSP [The IATA Billing & Settlement Plan acts as a communication hub, managing the whole ticketing, payments and reporting process between the travel agents and airlines] to make that easier and faster.
Air travel is likely to be cancelled for several more weeks yet but most airlines have only started this week to cancel flights for June 2020. So, during the next few weeks the airlines will be automatically be taking the balances for flights which they may then have to cancel, exacerbating this issue. The only way people will get a full refund is if they pay the balance for a holiday they know is very unlikely to go ahead.
The government needs to clarify the position on refunds immediately and stop procrastinating.”
What are the airlines doing?
I asked several companies for a statement about full refunds. Many did not respond as of the time of publishing.
British Airways said “Customers on cancelled flights can take a voucher for future travel up to a year or a refund.” But it is insisting on consumers phoning for a refund on phonelines which are either busy or with very long delays
A spokesperson for EasyJet said “Customers on cancelled flights can transfer to an alternative flight free of charge or receive a voucher for the value of their booking online or claim a refund through our contact centre or by submitting a claim via a webform, online.”
A Norwegian Airlines spokesperson said that customers “… would be entitled to claim a refund, rebook or claim cashpoints to be used at a later date.” But again only a phone number is available for refunds.
A spokesperson for Etihad said “For tickets purchased within Europe or the United States (for Etihad flights cancelled before 31 July 2020 due to COVID-19 border closures), Etihad will also offer greater booking flexibility, Etihad Credit, or a refund if requested.”
Perhaps surprisingly, Ryanair appears to be offering full refunds. It did not respond to a request for a statement but people are getting refunds online although there have been problems with the website and there is a backlog. However, given the thousands of people who are using the site, this is understandable.
At the point of going to print a number of airlines are still not providing full refunds at all, including Lufthansa, Air France, Eurowings, Turkish, Middle East Airlines, Transavia and Emirates.
A spokesperson for Emirates said “We are allowing customers to keep their ticket for use up to any period 24 months from the date of the original booking, without the need to contact us. Alternatively, customers can opt for travel vouchers which can be easily processed on our website. These vouchers can be used against future Emirates flights within 12 months. If vouchers are not utilised after 12 months, they can still be brought to us for refunds.” When pressed on the question of whether it would fulfil its legal obligations and provide a refund when requested, a spokesperson said “The statement is all we have to share at this time.”
TAP Portugal is refunding travel agents but not individual customers. In fact it has even said that the vouchers it is offering for two years will not be refunded, so you MUST use them! A TAP Portugal spokesperson said that the airline “will convert the full amount spent on purchasing the ticket into a non-refundable two-year validity voucher that can be used on any other flight, as well as a 20% increase of the voucher amount. Alternatively, customers can reschedule their bookings for trips starting until May 31 and choose another flight to any destination, in which case TAP will offer an additional 25EUR/USD or 100EUR/USD discount on the fare difference. TAP is thus simplifying the resolution of problems involving our customers’ bookings by providing a much easier solution, one that is adapted to the evolution of the coronavirus outbreak and our customer’s needs.”
One wonders how this is “much easier” than simply giving a refund! Pressed for clarification on whether it would fulfil its legal obligations, it has not yet sent a response.
And what about travel agents?
It’s not just the airlines either. On the LoveHolidays website it says “In line with ABTA guidance, for customers who have had ATOL protected holidays cancelled due to the global Coronavirus outbreak, we are issuing an ATOL protected refund credit note.” This is not correct. These are NOT ABTA guidelines, these are merely suggestions. Should a customer want and request a full refund, one should be given. I approached LoveHolidays for a comment and at the point of publishing had not received one.
Hoppa which provides transfers changed its terms and conditions to deny cash refunds and only provide credit notes. I approached Hoppa for comment regarding breaching consumer law and at the point of publishing had not received a response.
What can I do now?
Of course it is understandable that travel companies and airlines with no current income will struggle with refunding money to customers. And, of course, most people would accept that there would be some delay in receiving their refund. However, it is not acceptable for companies to breach consumer law nor is it acceptable for the CAA as the regulatory body to do nothing about it.
So, what should you do if you have been affected by a company not abiding by the rules?
“Rory Boland, Editor of Which? Travel, said: ‘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 maybe in difficult financial situations of their own.’
People need to know that they can trust the travel industry to treat them fairly, so we’ve launched a 10-point plan of what we want to see the travel industry and government doing to protect consumers during this unprecedented crisis.
We are calling for:
All eligible customers to be offered a cash refund
The Foreign and Commonwealth Office (FCO) to extend its travel advice to a specific date, rather than leaving it open-ended
Travel insurance terms and conditions to be made more transparent and clear.”