‘We must be honest and speak with one voice on refunds’

TTNG boss Gary Lewis warns ‘tsunami’ of chargebacks could be days away

The travel industry has been urged to speak with one voice about the need to amend package travel rules to avoid wholesale insolvencies which would leave customers out of pocket.

Gary Lewis, chief executive of The Travel Network Group, told a COVID-19 Travel Weekly webcast that the industry needs to be honest with consumers about their options for getting their cash back.

He said TTNG members in the Travel Trust Association and Worldchoice, have been successful in having difficult and increasingly angry conversations with customers to get many to defer bookings.

He said this has bought them time, but warned a “tsunami” of chargebacks or refund claims is maybe only days away.

The UK government continues to prevaricate over Package Travel Regulations changes, as has already happened in major European countries, that would give legal force to credit note refunds.

Lewis accused people in the industry who are saying customers should simply be refunded in 14 days as the PTR’s state of “not being honest” and being “disingenuous”.

“We’re not saying give up consumer rights, we’re being honest with consumers because imposing the PTRs is not going to get those customers those monies,” he said.

“It’s very easy for certain people to shout ‘I can give them the money’, but that’s just not practical across the whole market and it’s not the right time to be saying that right now.”

Lewis praised Abta for the work it is doing to highlight the plight of the sector and the number of jobs and livelihoods at risk.

“I absolutely support what’s being suggested and we have to have clear voice and one voice. This issue is so important.

The reality is all those companies want to refund their customers but the cash is not there to refund.

“If the cash is not there to refund a tidal wave of claims and chargebacks will simply create the insolvency of travel agents and tour operators.

“And we are at that moment now, with the 14 day rule now passing, that that could come down the road. So having an amendment to the PTRs to give time for the system to recalibrate is essential.

“And it’s essential that the airlines and the holders of that money pass that money back down the pipeline to refinance and recapitalise to give the money back. It’s as simple as that.”

Lewis said TTNG has had discussions with merchant acquirers about defending chargebacks and has given legal letters to agents to say they can defend them where they have acted as the retail agent.

But he said where they are the principal that’s is much more difficult. TTNG is also looking at whether consumers can granted a chargeback on something that is Force Majeure and risks putting the firm into insolvency.

And he said both Visa and Mastercard guidance it to allow the merchant have a “sensible conversation” with the customers instead if jumping into a chargeback process.

Lewis said TTNG members were given scripts to use in conversations with customers three weeks ago stating that their rights remain protected even if they aren’t able to give a cash refund.

“If we refund all our customers at once our members as travel businesses we will be insolvent,” he said.

“How can I make a choice between refunding you as a customer versus another customer because the money isn’t there, so let’s protect that process.

“We have to be honest. We all want customers to have the financial protection that they have right now, but the truth is it’s simply impossible to put that money back into customer’s pockets.

“After Thomas Cook’s failure there’s still people waiting for the CAA to process £250,000 worth of bookings. There’s now far more bookings in the pipeline that would need to be refunded in 14 days.

“So our members are having those really tough conversations with customers, but they’re being honest and they have been very successful where they have that trusted relationship.

“The honest conversation is I want to refund you but the money’s not there. You’re going to have to wait two, three, four months to get that money.

“If you sue me and I go out of business you are going to have to wait 10, 11, 12 months. If you take me to the small claims court you’re not going to get in the court until November. Let’s be practical.

“The politicians are talking about a war against this virus. The normal rules have stopped. We need help to get through this process.”

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