Abta insists suppliers must not delay refunds to ‘maximise liquidity’

Abta has urged supplier members to ensure their refunds for holidays cancelled as a result of Covid-19 are paid as promptly as possible, and only delayed when it is “absolutely necessary” for their survival.

The association shared a copy of an open letter from the Competition and Markets Authority (CMA) warning firms of potential enforcement action, which includes how package holiday companies should respond to refunds and cancellations during the pandemic.

More: Tui claims to be able to process new refunds within 14 days

The CMA had sent the letter directly to more than 100 travel firms facing the highest number of complaints, of which 17,500 have been received since March.

In its email, Abta said members should offer a refund where required by law, including on rebookings, as soon as possible.

It said: “Members should not delay refunds any more than
is absolutely necessary for their own survival – in particular refunds must
not be delayed until close to the end date of a Refund Credit Note simply to
maximise liquidity.”

The CMA’s “advisory” letter acknowledged the “extraordinary pressures on package holiday businesses”, but stated: “Although
we were sympathetic to the challenges faced in the early days of the pandemic, it is nonetheless important businesses comply with consumer law.”

It added: “While the CMA is not beginning enforcement action against your company at present, we continue to monitor the complaints and intelligence we are receiving.”

But John Bennett, managing director, Colchester Travel Group, which owns operator Nordic Experience and agency Colchester Travel, felt sending a generic letter out “willy-nilly” was the wrong approach.

“It’s too easy to blast out an email without first sanitising the complaints to see which are justified,” he said. “The letter includes implied threats. People don’t know what it’s like at the coalface.”

A senior industry source said: “The volume of complaints, 17,000, looks big. But when you consider the number of bookings affected, it is a minority of consumers. There were perhaps four million cancellations. There are 2,000 Atol holders.

“The CMA writing to 100 companies is not a surprise. A very small handful of Abta members did not get it right and they have come into line.”

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