Abta sought a temporary suspension of chargeback rights on credit card transactions at the height of the cancellations and refunds crisis due to Covid, but the government refused.

John de Vial, Abta director of membership and financial services, revealed the association asked the government to intervene when he addressed the Travel Weekly Future of Travel summit this week.

De Vial said: “We did a lot of work talking to the Department for Business and other agencies of government about that [the Consumer Credit Act] and whether anything could be done to interfere with it on a temporary basis, to suspend it in some way during this crisis, particularly for the retail community.

“The government wasn’t prepared to do that.”

De Vial said: “The real victims of chargebacks are retailers.

“Retailers would not ordinarily have the legal responsibility [for refunds] of a travel organiser or an airline. Yet they are the merchant of record on a transaction under the Visa and MasterCard agreements.”

He explained: “Part of the problem with chargebacks is that the system operates under agreements that Visa and MasterCard hold with merchants and operates as a separate regime to the law.

“The fact that a consumer can recover their funds under the Consumer Credit Act is a protection that, in most circumstances, we all value as consumers.

“It seems very sensible and indirectly relieves the burden in many areas of our industry on other protection costs.

“So in normal times, we look fondly on it as something that benefits our industry.”

De Vial argued: “Different acquiring banks have behaved quite differently through this, some being pretty good and consistent on recognising refund credit notes and rebooking arrangements, others less so.

“It is a real problem, but I can’t see anything fundamentally changing.

“The government will say that, outside of something as extraordinary as Covid, this is good for consumers and good for confidence in trade.”

Stephen Mason, senior counsel at Travlaw, told the summit: “My message to agents is to challenge, challenge, challenge chargebacks.

“Just because you receive notice of a chargeback, doesn’t mean you have to lie down. You have a right to challenge, a right to appeal.”

Mason said: “We all know the system works in rather random ways, so it’s hard to predict the outcome of any one challenge. But over a number of cases, if you challenge and a percentage end up in your favour that can add up to a considerable sum of money saved.”