The Competition and Markets Authority (CMA) has insisted on consumers’ right to refunds for holiday cancellations due to Covid restrictions, revealing it has received “more than 25,000 complaints”.
But some industry lawyers have challenged the CMA view and CMA assistant director for policy and advocacy Andrew Hadley conceded last week “one firm, in particular, was responsible for a lot of those” 25,000.
Hadley told an Abta Travel Law Seminar: “Package travel is one of the leading areas of complaint. We’re sympathetic to the extraordinary circumstances so we haven’t been taking tough action on the timing of refunds, but we can’t change the law.”
Consumer publication Which? has repeatedly criticised package organisers for failing to pay refunds for cancelled bookings within 14 days as required by the Package Travel Regulations (PTRs).
The CMA raised the pressure in April when it added package travel to a “first tranche” of sectors – weddings, accommodation providers and child care nurseries – it identified for investigation after setting up a consumer web form “so we could see where there were concerns” as “the CMA does not deal directly with consumer complaints”.
Hadley said package travel “hasn’t been the focus of our enforcement action yet, [but] we’re looking at whether we need to take further action”.
He noted: “We largely hoped Trading Standards would take on any issues in enforcement of the PTRs but they, like everyone, are incredibly stretched.”
The CMA published guidance on refunds for businesses and consumers in April and updated and expanded this in August “because of the additional restrictions”.
Hadley acknowledged: “It’s our view of the law. [But] in the end, it will be judges and courts which decide.”
Leading industry lawyer Rhys Griffiths, head of travel at Fox Williams, has criticised the CMA view of the legal position in relation to Foreign Office advice as “over-simplistic” and warned it “risks creating false expectations”
However, Hadley told the seminar: “What we’ve said is ‘if a package holiday could be cancelled in light of Foreign Office advice against travel, we think consumers are entitled to a refund. There is a little uncertainty there. It is an ‘if’.
“The PTRs are not as clear as some Abta members might like, but there is a general assumption the law means you should be getting your money back.”
He argued: “Where there is quarantine in place at the destination, it’s likely to lead to a cancellation right. It’s less clear where there is quarantine on return as that does not affect the fulfilment of the contract.”
But Hadley added: “It’s very difficult not to see the existence of this virus in a destination as ‘unavoidable and extraordinary’, in which case it would give consumers the right to a refund.”
The PTRs give consumers the right to cancel a package booking with a full refund in the event of “unavoidable and extraordinary circumstances” at the destination “or its immediate vicinity”.
More: Foreign Office advice ‘not legally binding’ say lawyers
