Fears are growing that theincreasing burden of credit card chargebacks made by customers already due refunds could force some agencies out of business.

Agents have contacted Travel Weekly to highlight the escalating problem as retailers battle to pay refunds owed to customers as a result of widespread cancellations.

Peter Cookson, group managing director at Spear Travels, said chargebacks are becoming a “nightmare” and “incredibly time-consuming”.


MoreAdvice: At-a-glance guides to Refund Credit Notes and chargebacks

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He said one client thought a chargeback would save the agency time, despite being told a refund would be paid within four weeks.

“We are aware of people claiming on their insurance and also getting their money back on their card deliberately,” added Cookson.

Cruise Nation founder Phil Evans posted on Facebook that one customer instigated a chargeback for £3,420 despite being fully refunded in July. He said the customer refused to cancel the chargeback until they received compensation for losing the holiday.

Agents at Hyde Barker Travel in Southwell, Nottinghamshire, and RB Collection in Lichfield, Staffordshire, have also spoken out about how time-consuming and difficult it can be to fight chargebacks initiated by clients when refunds were due to be paid.

Nick Edwards, managing director at Snow Finders, wrote to Abta asking for support for agents burdened by extra costs, stress and red tape. “Some agencies might not survive,” he said.

Edwards called on Abta for “urgent assistance”, adding: “The situation is simply untenable for retail agencies to be faced with such onerous financial penalties and in effect be the risk takers for the tour operators, suppliers and principals.”

Before the pandemic, he had received one chargeback in 20 years – now he is “inundated” with 17, totalling almost £35,000.

An Abta spokesman accepted the chargebacks issue is “unfortunately continuing” among retailers, and that Abta “has been doing all it can”.

He said Abta has put pressure on the Civil Aviation Authority to enforce refund obligations on airlines; making tour operators pay refunds as soon as possible; and introduced Refund Credit Notes as an alternative.

Abta also said it had “made clear” to government that specific support may be required “to assist fundamentally healthy companies through this crisis” and called on credit card firms to be “pragmatic” because “it is not in their commercial interest for travel companies to fail”.

MoreAdvice: At-a-glance guides to Refund Credit Notes and chargebacks

Advice: What you need to know about Chargebacks and Section 75 of the Consumer Credit Act

Chargeback fears as RCN deadline looms