Tourism minister Nigel Huddleston says the government must come up with a solution to the refunds debate that suits both consumers and travel businesses.
He said it was important the two were not seen to be at “loggerheads”, but was unable to give any answers on when decisions might be made.
Abta has been lobbying the government to warn that customers who are chasing refunds from travel companies would be likely to have to wait longer to get their money returned to them as some companies could be put out of business if forced to refund in line with the 14-day refund rule in the Package Travel Regulations (PTRs)
The government’s Department for Transport (DfT) is understood to be close to signing off Abta-endorsed Refund Credit Notes – that would mean Refund Credit Notes will retain Atol protection against insolvency – but the Department for Business (BEIS), which oversees the PTRs, is concerned about appearing anti-consumer.
Consumer groups, including Which?, have been lobbying for customers to receive their refunds immediately.
Speaking in a UKinbound webinar earlier today, Huddleston said: “This is absolutely a hot topic at the moment. We as MPs are getting inundated on both sides of this issue in terms of businesses writing to us saying they’re struggling, and consumers saying they want their money back straight away.
“What we need to do is find a way so that this issue is not seen as consumers on the one hand and businesses on the other going loggerheads, but we find a way to integrate those interests. Of course, what we don’t want to see is consumers unintentionally demanding money back, and then undermining the viability of that business if some alternative can be come to.
“The reality at the moment is there is a legislative framework, the legal protocols are quite clear, whether that’s refunds, credit or more broadly the Package Travel Directive. The law is very clearly what it is. But I know companies are simply struggling to process these refunds even if they’re in a [financial] position to do so because they don’t have people on the ground.”
Huddleston, who has previously worked for Google and Deloitte in the travel sphere before becoming an MP, added: “What I can say is we are having conversations, in particular between Beis [the Department for Business, Energy and Industrial Strategy] which is responsible for consumer affairs legislation and also the Department for Transport because this is a major issue I know with airlines.
“Rather than looking at that as a confusion or a problem with different departments looking at this, what I can tell you is we are working together to try to come up with a solution on this.
“It needs to be reasonable and sensible because there is this consumer and business dichotomy. But we’re taking the issue very seriously, we’re looking at what other countries have done, and taking advice from the industry sectors. There is real time sensitivity to this with the peak summer period and we’re aware of that. We all know it’s an urgent issue and we’re looking at it very seriously.”