Consumer protection authorities won’t strictly enforce refund rules on the travel sector despite the government’s failure to clarify the status of Refund Credit Notes for cancelled holidays.
The Competition and Markets Authority (CMA), the principal enforcer of consumer protection, has confirmed an investigation of businesses failing to respect refund rights, announced last week, will not take in package travel.
And Trading Standards, which has responsibility for enforcing the Package Travel Regulations (PTRs), has issued guidance noting: “Traditional legal remedies and enforcement are likely to be inappropriate at this time.” As a consequence, the Chartered Trading Standards Institute (CTSI) has advised it “wants all credit notes financially protected”.
The CAA, which enforces the Atol rules, has yet to clarify its position but industry leaders insist the CAA stands behind Refund Credit Notes, which remain Atol-protected.
Abta chief executive Mark Tanzer expressed hope the CAA would confirm the insolvency protection of Refund Credit Notes for Atol bookings, as Abta has already done, saying. “I don’t think there is a structural impediment to the CAA doing that.”
Speaking on a Travel Weekly webcast, he said: “Our reading of the Air Travel Trust payment policy makes clear deferred refunds against Atol bookings are payable if the company fails. We want the CAA to come out and say that clearly and unambiguously. That would help everybody. I’m hopeful they will.”
A senior industry source said the CAA had not clarified its position because it “did not want to be seen as condoning not refunding within 14 days” without a statement from the government. This continues to be held up by the Department for Business.
However, the source said: “Abta came up with Refund Credit Notes with the CAA. The CAA has never suggested they are not protected. Abta and the CAA are completely aligned on this.”
A second industry source said: “It’s ridiculous there is nothing from the government. If nothing is going to happen, someone needs to say that.”
Speaking on an Elman Wall webinar, Abta director of membership and financial services John de Vial said: “It’s clear the government does not want to come off the fence to avoid doing anything that could be construed as unfriendly toward consumers and is leaving it to us and the CAA to see if we can do enough to reassure consumers.”
Industry lawyers advised businesses to follow Abta’s guidance in lieu of clarity from ministers.
Stephen Mason, senior counsel at Travlaw, said: “You get the odd company that thinks issuing a credit note is all you have to do. That is not what Abta has ever said.
“If companies genuinely follow what Abta has said, a good percentage of people are amenable to rebooking or accepting a Refund Credit Note if you explain it properly.”
Webcast: Abta’s Mark Tanzer