Tag: cancellations

More than £1 billion in refunds being illegally withheld for cancelled holidays

More than £8 billion worth of package holidays are estimated to have been cancelled since the beginning of the coronavirus outbreak, with just over £1 billion still estimated to be outstanding in refunds, according to new research from Which?.

Millions of people have had a package holiday cancelled by their provider since the UK went into lockdown in March, with refunds for one in five (21%) holidays where a cash refund was requested still outstanding at the beginning of October.

Which? surveyed more than 7,500 people who have had a package holiday cancelled as a result of the pandemic to understand how the situation around refunds has developed since the UK first entered lockdown.

An estimated total of just over £1 billion is being illegally withheld in partial or full refunds from customers who requested their money back, with the survey suggesting the average cancelled holiday cost £1,784.

Under the Package Travel Regulations 2018, if a package holiday is cancelled by the provider, the customer is legally entitled to a full refund within 14 days. A package holiday is a booking comprising at least two types of travel or travel-related services made through the same source, most commonly flights and accommodation. 

Around 9.4 million people are estimated to have had a package holiday cancelled by their operator since the pandemic hit the UK. The backlog of refunds for cancellations caused by the coronavirus pandemic meant that the majority of operators struggled to refund within the legal time limit, with customer service lines overwhelmed by travellers trying to contact them to ask about their refunds. 

Some package providers reported delays in receiving refunds back from airlines, many of which – despite making commitments to the aviation regulator – continue to break the law on refunds. This has meant package holiday operators have often only been able to process partial refunds for customers. 

But while some companies have managed to get on top of the backlog caused by these delays, several other major providers have continued to leave passengers out of pocket, with Which? still receiving huge numbers of complaints from customers waiting for refunds.

The average amount of time spent contacting package holiday companies about cancelled trips was around 15.5 hours. For more than four in 10 (43%) of the cancelled holidays reported to Which?, customers said they waited longer than a month to get their money back.

During the summer, the Competition and Markets Authority (CMA) launched an investigation into package travel companies’ handling of cancellations and refunds. Following pressure from Which? and the CMA, Tui agreed to refund all customers by the 30th of September. The regulator also recently confirmed that Virgin Holidays has also committed to processing refunds for all holidays cancelled up to the end of October by 20 November.

Nearly four in ten (37%) people who have had a package holiday cancelled by their provider since the beginning of the outbreak said the experience has had a negative impact on their confidence in the travel industry. 

Which? is calling on the government to outline how it will support the travel industry through the rest of the pandemic, and is urging it to introduce a travel guarantee fund to support package holiday providers that are struggling to fulfil their legal obligations to refund customers. It should also conduct a review of passenger protections following the coronavirus outbreak.

While the CMA has already secured commitments to process refunds from some companies, it is clear that some firms are not improving their practices of their own volition. The competition regulator must continue to closely monitor operators and secure further undertakings from those that flout the law, to prevent trust in travel being damaged any further.

Which?’s advice to anyone looking to book a future holiday is to book with a provider that can be trusted to refund their money promptly if they can’t travel, and to consider booking a package over a flight-only booking, to ensure they have greater legal protections if they cannot travel because of coronavirus.

Rory Boland, Editor of Which? Travel, said: “Since Which? first highlighted the issue of holiday companies delaying or denying refunds for holidays cancelled due to coronavirus, some operators have continued to flout the law and the sums of money being illegally withheld from holidaymakers are staggering.

“It’s simply unacceptable that some of the UK’s largest operators are still getting away with breaking the law, but without meaningful intervention from the government and the regulators in this space, many people will struggle to get their money back. 

“The CMA must take firm action against any operators that are continuing to drag their feet on refunding holidaymakers, and the government must urgently set out how it will support travel companies in fulfilling their legal obligations to passengers.”

2021 holidays – the tour operators and travel agents Which? recommends:

 www.which.co.uk/news/2020/10/holidays-in-2021-the-tour-operators-and-travel-agents-which-recommends 

HOLIDAYMAKERS IN EDINBURGH OWED NEARLY £8 MILLION IN WITHELD REFUNDS

LOCAL MSP SAYS REGULATOR MUST DO MORE TO SUPPORT CUSTOMERS  

SNP MSP for Edinburgh Pentlands has demanded action after the latest estimations from Which? suggested people in Edinburgh could be owed £7,858,609 in withheld refunds for cancelled trips.

Customers across the UK are waiting on more than £1 billion in refunds according to the results of the survey of more than 7,500 people who had a package holiday cancelled as a result of the pandemic.

Expressed a proportion of population, the findings of the survey suggest that holidaymakers in Edinburgh could be owed nearly £8 million.

Holiday companies are required to refund money within 14 days but the huge number of cancellations has left many of firms overwhelmed. 21% of those surveyed who requested a refund in March were still waiting at the beginning of October.

The research also found that the average cost of a cancelled holiday was £1,784.

During the summer, the Competition and Markets Authority launched an investigation into package travel companies’ handling of cancellations and refunds.

Commenting on the figures, local SNP MSP Gordon MacDonald said: “For many people, this saga has rumbled on for far too long – it’s time for the UK government and the market regulator to get a hold of this situation.

“Times are tough financially for many local families, and while I appreciate holiday companies were inundated with refund requests earlier in the year, we are now in November.

“We aren’t talking about spare change here – the average cost of a cancelled holiday was £1,784 according to this survey.

“While we all recognise the travel industry’s acute financial difficulties, there can be no excuse for them hoarding the hard-earned cash of their hard-pressed customers.

“As a matter of urgency, the UK government needs to set out how travel companies will be supported financially to fulfil their legal obligations to passengers – and take firm action against those who continue to drag their feet.  

“I would urge anyone in Edinburgh Pentlands who is still waiting on a refund from March to get in touch with my office – I will offer any support I can to make sure you get your money back.”

Couples jilted at altar by wedding venues cancelling big day – and pocketing their cash

Wedding venues are potentially breaking the law by exploiting unfair terms and conditions to avoid refunding couples for cancellations due to coronavirus, a new Which? investigation reveals.

Many frustrated couples have contacted Which? as they are struggling to get refunds, often worth tens of thousands of pounds, from venues for weddings cancelled or postponed due to the coronavirus crisis, in line with the government’s March 23 ban on large gatherings for weddings.

Of the 25 couples Which? has spoken to, 20 said their wedding venue refused to offer a refund or made the process for obtaining a refund difficult. A similar proportion said they had not been offered like-for-like dates or offered a refund if the price for the postponed date was cheaper. 17 couples said their venue has charged a fee to rebook or cancel their wedding and 15 couples said their venue has introduced new terms and conditions.

The consumer champion is reporting 12 wedding venues and organisers to the Competition and Markets Authority (CMA). It analysed the contracts of eight venues that had potentially unfair terms and conditions and heard from a further four couples whose venues were potentially breaching the regulator’s guidance on refunds and cancellations, which was issued last month after the CMA announced it was investigating this sector.

The CMA also outlined its expectations for businesses, in most cases, to refund customers if they cancel or cannot receive a service due to Government public health measures, including any non-refundable deposits or advance payments. It expects businesses to waive any admin fees for processing refunds too.

Which? received most complaints about the Bijou Weddings group, a family-run wedding venue chain. Some of the couples that had booked with Bijou said the venue told them just before the government announced a ban on weddings that not only had their weddings been cancelled, but that they were liable to pay a cancellation fee of 80 per cent of the total cost of their weddings.

In May, a number of Bijou customers reported new contract terms had appeared on the website, stating that couples could postpone if their original date was not possible due to the coronavirus pandemic, but with no reference to a refund. This would be in breach of the CMA’s guidance that states rebooking should not be offered instead of refunds.

Bijou told Which? the new contract uploaded to the site was a blank template and appeared due to an IT error. Which? has seen the new terms that appeared on the site after some couples were able to take a screenshot of the contract before it was removed.

By law, new terms and conditions must be fair and can be unenforceable if they give too much power to the business providing the service. Which? analysed the new and pre-existing terms and conditions from a number of wedding venues, including Bijou, and found some that could be seen as unfair and unenforceable as they significantly reduce customers’ rights.

Which? has also heard from Bijou customers who said the venue suggested they claim with their insurer to avoid refunding customers for cancelled weddings.

Claudia had booked her wedding at Bijou’s Botleys Mansion venue. When the venue cancelled and asked for an 80% cancellation fee, it suggested she claimed the money back from her insurer and used the money to rebook. Most insurers have refused to pay out for cancellations, so Claudia risked being left out of pocket and with no idea if or when she would be able to get her money back.

Most wedding insurers had stopped selling new policies by mid-March following a surge in demand. However, those with existing policies have found themselves caught between venues that refuse to pay out and insurers with unclear policies or “exclusion clauses” which mean they do not have to pay out either.

Another couple, Marcus and Georgina, said they had endured a “torturous” experience with the company. They were disappointed when Bijou’s Botleys Mansion refused to refund the price difference after their weekend wedding in June was postponed to a weekday. The venue insisted the CMA’s guidance would not entitle them to reimbursement if a like-for-like replacement is not available.

Emily and Louie, who had paid over £20,000 for their wedding at Bijou’s Cain Manor, said they “could not express the stress and heartbreak” caused by the venue who have not offered a like-for-like new date and refused to refund the difference.

Which? believes these complaints are just the tip of the iceberg and there could be an industry-wide issue when it comes to refunds and cancellations.

As well as two Bijou Weddings venues, Which? has shared information with the CMA on 10 other wedding venues who have potentially unfair terms and conditions or have potentially breached the regulator’s guidance, including Tournerbury Woods Estate in Hampshire.

The Hampshire-based venue claimed one couple would forfeit their fee if they wanted to rebook their cancelled May wedding for the same time next year. The couple has now been offered a refund, but only after weeks of trying to arrive at a solution.

Adam French, Which? Consumer Rights Expert, said: “We believe there may be a serious, industry-wide issue with wedding venues ducking their legal responsibilities on refunds and cancellations by using potentially unfair terms and conditions.

“While many wedding venues may have been financially impacted by the coronavirus crisis, couples who are likely to be devastated at having to cancel their big day should not be forced to bear the cost.

“The CMA is currently investigating this sector and must be ready to take firm action against venues found to be breaching consumer law so customers have some prospect of getting their money back.”

Bijou Group said: “We have been doing everything we can to navigate these very challenging times with as little disruption as possible to our couples and their big days, which we have been working on planning with them for up to two years, incurring significant costs along the way.

“The huge majority are very appreciative and understanding but there is unfortunately a very small minority (around eight or nine) who are not entirely satisfied and have taken to press, social media, review sites, solicitors and so on in an attempt to get what they want. We are considering every case, at length, individually to understand what we can do to help but must also be consistent and fair.

“Without cancellation charges like these, the industry would not be able to offer to consumers what it does at the prices that it does. The cancellation charges protect the venues, and there is wedding insurance to protect the couple.

“We did not cancel any weddings voluntarily – it was imposed on us – and this is exactly the situation for which wedding insurance exists.”

It told Which? Thursday-Sunday postponement dates were one of many options offered to couples.

Tournerbury Woods Estate said: “We have used our best endeavours to try and accommodate each of the couples’ varying needs and requirements to help with postponing their big day, to a day next year when we all hope the Covid 19 crisis will be over.

“Fortunately, we have managed to find a fairly swift and workable solution for the majority of the couples that have had to postpone their weddings.”