Which? is calling on banks to clarify their “inconsistent and confusing approach” to refunds.
The consumer champion said “huge number of customers” were “deeply dissatisfied” with travel companies, and other businesses, asking them to rebook or accept credit notes.
Customers who had chosen to seek refunds via credit card chargeback or Section 75 of the Consumer Credit Act have been denied, Which? found.
Travel agents acting as the merchant have been faced with multiple chargebacks when they are still waiting for pipeline monies from suppliers they have paid for the holiday or components of it, and have challenged claims made though chargeback or Section 75.
More: Suppliers urged not to leave agents stranded on chargebacks
What you need to know about Chargebacks and Section 75 of the Consumer Credit Act
Mastercard and Visa’s Covid-19 guidance says that merchants “can offer a credit for future use” in place of a refund “if acceptable to the cardholder”, but should process a refund if the cardholder declines.
Which? said its research found that banks were dealing with claims on a case by case basis and warned than a lack of information leaves holidaymakers “unaware of vital consumer protections”.
It added that 10,000 people had used its chargeback and section 75 tool in March and April, ten times the 1,000 people who used it in January and February.
Gareth Shaw, head of money at Which?, said: “While it is a very difficult time for businesses, the coronavirus outbreak has also put people’s finances under considerable pressure, and they deserve to get their money back if they want a refund for a cancelled event or trip, rather than a voucher or the option to rebook.
“However, there is clearly confusion about the circumstances which allow banks to help their customers achieve this. There needs to be greater clarity and consistency about claiming through banks, and the industry should ensure that all bank customers have a fair chance of getting their money back.”
