Holiday firms told to pay swift COVID refunds after 23,000 complaints

·3-min read
The CMA said holidays cancelled due to the pandemic must be refunded within 14 days. Photo: Getty Images
The CMA said holidays cancelled due to the pandemic must be refunded within 14 days. Photo: Getty Images

The UK’s competition regulator has warned package holiday companies including Tui (TUI.L) to “respect the refund rights of holidaymakers” ahead of travel restrictions easing next week.

The Competition and Markets Authority (CMA) on Thursday published a letter sent to 100 package travel firms asking them to ensure refund options are clear and accessible. It follows a deluge of complaints from customers who have struggled to claim refunds over the last year.

"International travel is set to resume soon and lots of people will be considering a long-awaited trip abroad," said Andrea Coscelli, CMA’s chief executive. "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’ve 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."

Since March 2020, the CMA received over 23,000 complaints from consumers about refund issues relating to holidays cancelled due to the coronavirus pandemic. The CMA sent its letter to the 100 most complained about firms.

“You should check that your practices and policies are in line with the requirements of consumer protection law," the letter stated. "This might require you to consult with your legal adviser. We strongly advise you to make any necessary changes as soon as possible."

Watch: Holidaymakers giving up on this summer due to 'lack of clarity' on rules, says travel firm TUI

Cancelled holidays must be refunded within 14 days and any offer of a refund credit note must be accompanied by the option of a full refund. Customers should be able to exchange their credit note for a refund at any time.

Consumers have a right to a full refund where they decide to cancel their package because “unavoidable and extraordinary circumstances” at the destination.

In response to the letter, Tui UK has given a formal commitment to provide clearer information on refunds to people whose holidays have been cancelled due to COVID-19.

Read more: Tui bets on Greek and Spanish summer holidays as it crashes to €1.5bn loss

The CMA previously took action against five top package travel companies, securing more than £200m ($281m) in refunds for customers. These included Teletext, LoveHolidays, Lastminute.com and Virgin Holidays, along with Tui.

The UK government has said international travel will open up on 17 May with a 'traffic light' system where destinations will be divided into red, amber and green. Those travelling to countries on the green list (currently only 12) will not need to quarantine upon return.

Online travel agent On The Beach (OTB.L) has suspended sales of travel packages for the summer until September, citing COVID-19 uncertainty. This includes nations on the green list, including Portugal.

EasyJet (EZJ.L) and Tui will allow consumers to book holidays to countries on the amber list. Tui plans to focus on destinations including Greece, Balearics and Canaries, where it is anticipating strong vaccinations rates and low infection rates.

The government's official advice is not to travel to such places for leisure purposes but it will not be illegal to do so after 17 May.

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