Abta has issued fresh guidance on refund credit notes and confirmed deferred Atol bookings will be protected as ministers continue to balk at offering the legal clarity the industry needs.
The association has also extended the expiry dates of refund credit notes issued by most members beyond July 31 as it continues to press the Department of Business (BEIS) for a temporary suspension of the requirement to pay refunds for cancelled package bookings in 14 days.
That would bring the UK into line with most of Europe and with guidance from the European Justice Commissioner who has recommended allowing credit notes in place of immediate refunds.
However, BEIS remains frozen by what an industry source described as “UK consumer politics”.
Alan Bowen, advisor to the Association of Atol Companies, said: “I’m surprised we haven’t seen failures. We’re beginning to see customers put in claims for chargebacks and that will finish people off.
“The CAA is pushing the Department for Transport and Beis to say Refund Credit Notes are a ‘reasonable’ solution. Without that, the CAA can’t say ‘We support Refund Credit Notes’.”
Bowen insisted: “[Business secretary] Alok Sharma is doing nothing. We need action and we need it now. Other European governments have made temporary changes to the regulations.
“This is not a game. Sharma needs to act.”
The Greek government this week became the latest to allow agents, airlines, hotels and ferry firms to refund cancelled bookings with vouchers, delaying entitlement to a full cash refund for 18 months, while Germany suspended the requirement for airlines to refund customers for cancelled flights, ignoring EU regulations on air passenger rights.
An industry source said: “What Abta is proposing is spot on with what the EU Justice Commissioner has said. We’re all waiting for government guidance.”
Card giants Visa and Mastercard have said they support “merchants offering ‘reasonable alternatives’ [to refunds]”, but it’s up to consumers whether they accept these.
However, Mastercard notes cardholders “may need to accept a voucher” if the government acts.
A spokesman for financial services association UK Finance said: “Customers should refer to Abta and Atol for guidance on cancelled holidays.”
UK Finance guidance notes: “Chargeback is not a legal right” and advises consumers “There are no guarantees . . . the trader will accept you are justified in having money back.” However, it makes no reference to the current extraordinary circumstances.
Abta is advising members to cancel bookings two to three weeks in advance despite Foreign Office advice against travel “for an indefinite period”.
The source said: “Most companies are struggling because of the number of bookings affected.”
The Abta guidance includes briefing notes for frontline staff, advising they tell customers: “Refund Credit Notes are being used in response to the coronavirus crisis because travel companies can’t provide cash refunds immediately to all customers.”