9th June 2020

LTS warns on ‘refund vouchers’

With event and holiday cancellations surging because of the COVID-19 crisis, London Trading Standards is calling for consumers’ rights to be upheld.

By JTS Staff
Journal of Trading Standards' in-house team
Consumer rights to a refund are enshrined in EU and UK law and must be upheld

London Trading Standards (LTS) is calling for consumers who have tickets for cancelled flights, holidays and events to have their legal rights to a refund upheld, and has published advice to consumers on its website.

According to LTS, complaints about travel firms in London were up 280% during March to May 2020, compared with last year. Complaints about cultural and entertainment firms were up 218% and against transport operators up 195% compared to a year ago.

The UK’s Competition and Markets Authority (CMA) recently published data showing it had received almost 20,000 holiday-related complaints about cancellations and refunds; a further 8,000 complaints about airlines and almost 2,000 relating to events.

Some companies struggling to fund cancellation refunds have been attempting to pressure customers into accepting vouchers instead of refunds. Such vouchers aren’t financially protected if the company goes bust.

If a consumer has bought a package holiday, Refund Credit Notes (RCNs) which are financially protected – for example by the Association of British Travel Agents (ABTA) – may be available.  These offer a safer alternative to vouchers and the consumer should be able exchange these for a cash refund at a later date. However, consumers must legally be offered a cash refund.

Some travel agents have also been deducting significant ‘admin’ fees from refunds, contrary to the law, and this practice should be reported and stopped, says LTS.

Under EU and UK law, companies must provide a refund in the event that no service is provided to the customer.

LTS Operations Director, Stephen Knight, said: “The travel and event industry is obviously facing an enormous challenge in the current pandemic, but it is not the responsibility of individual consumers to provide an industry-wide bail-out. Consumer rights to a refund are enshrined in EU and UK law and must be upheld.

“Where package holiday consumers are willing to accept an alternative to a cash refund, then financially protected Refund Credit Notes, such as those backed by ABTA, that can be exchanged for a cash refund or future travel is much safer than a simple voucher.

“We are also aware of some travel agents seeking to charge ‘admin’ fees of around £75 per person for processing refunds.  This is unacceptable and consumers should report any such cases to trading standards.”

CTSI Chief Executive, Leon Livermore, said: “This has been an incredibly challenging time for both holidaymakers and travel companies alike. Consumer protection professionals are working hard to support both consumers and businesses through this crisis.

“I hope that once the pandemic subsides, the UK travel industry will return to health, and consumers disappointed by the cancellations will be able to enjoy future excursions backed by good consumer law.”

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