With hopes of a return to holidays abroad within weeks, some package providers that broke the law last year are still misleading customers over their right to a refund and other financial protections, according to a new investigation from Which?.
Ahead of the government revealing the ‘green’ list of countries that travellers can visit without the requirement for quarantine on their return, Which? mystery shopped six of the UK’s biggest package travel operators to find out if customers making new bookings will get their money back if lockdowns or quarantine prevent them from travelling.
Which? spoke to three agents each from Love Holidays, On the Beach, Teletext Holidays, Trailfinders, TravelUp and Tui.
Of the six companies, only Trailfinders and Tui consistently answered Which?’s questions in line with the law and in line with the company’s official policy.
Agents at all of the others either suggested to the consumer champion’s researchers that they were willing to break the law over refunds, or misled them about how their holiday would or wouldn’t be protected.
Which? asked the travel companies:
- Whether customers would get their money back if the government banned international travel before they were due to depart;
- Whether they would get a refund for both their flight and accommodation together if the holiday was cancelled by the provider;
- Whether customers could cancel for a full refund if they are told they will have to quarantine on arrival at their destination;
- And how they would be refunded under the Atol scheme if the company were to collapse.
When asked about the government banning travel before they were due to leave, only Trailfinders, TravelUp and Tui repeatedly gave assurances that they would be entitled to a refund. Love Holidays, On the Beach and Teletext were all inconsistent in their responses.
Legally, customers may not be entitled to a refund if they cannot travel because of a national or regional lockdown. However, Which? only recommends booking with companies that have committed to paying out in this scenario.
While On the Beach officially told the consumer champion it would refund customers in the event of a travel ban, two of its agents said otherwise. Teletext also gave mixed responses and when Which? approached the company for clarification, it refused to comment.
Love Holidays told Which? that customers would only be able to receive a full refund in this scenario if their airline cancelled their flight – and while it agreed this was unfair, it would still deny full refunds on this basis.
By law, customers whose package holiday is cancelled by their provider should be entitled to a full refund within 14 days, regardless of whether the airline cancels the flight or not. However, some companies have been denying full refunds on the basis they have not been able to secure refunds from airlines for the flight portion of the booking.
Airlines require full payment for the flights from the package holiday provider in advance, meaning that when flights booked as part of a package are not cancelled, it can be difficult to recoup the money from the flight carrier.
When Which? investigated, only Trailfinders and Tui committed to reimbursing both flights and hotels within the 14 days legally required.
Trailfinders guarantees customers will receive a full refund if their holiday is cancelled by ‘ring-fencing’ customer payments, meaning when refunds were due, their money would be returned to them in full and without delay – a model not replicated by the other providers. All the other companies suggested that full refunds would depend on whether or not the airline cancelled the flight.
Love Holidays said it would wait to be reimbursed by suppliers before passing the money onto customers, even though it has already faced an intervention from the Competition and Markets Authority (CMA) for withholding refunds from customers while it chased money from airlines.
Similarly, Teletext has also been investigated by the CMA for withholding refunds, and is now facing court action if it fails to refund over £7 million in customer payments.
Despite the company being under investigation at the time, an agent still told Which?’s undercover researcher that customers could expect to wait up to two months for their money back while it chased suppliers for refunds.
While TravelUp said it was refunding within 14 days “wherever possible”, agents told the undercover researcher it relied upon receiving refunds from suppliers, and that it charges customers an admin fee – a minimum of £50 – to chase their refunds for them.
The researcher also asked if customers would be entitled to their money back if they were required to quarantine on their arrival. Denying a refund on this basis is in breach of the Package Travel Regulations, as having to quarantine on arrival should be considered an ‘unavoidable and extraordinary circumstance’ that will significantly affect the performance of a package holiday, meaning customers should be offered the choice between a reasonable alternative or a refund.
Only Tui and Trailfinders said they would provide refunds for customers in this scenario. Agents at all the other companies Which? spoke to said customers would only receive a full refund if the airline cancelled their flight.
However, official responses from Loveholidays, On the Beach and TravelUp all contradicted the advice their agents had given on the phone, insisting that customers would be due a full refund if they cancelled because of instruction to quarantine on their arrival.
The consumer champion also questioned agents about how holidays were protected under the Atol scheme. Atol protection ensures customers will receive the option of a full refund if their provider goes bust before their package holiday takes place or while they are abroad.
Nearly every agent answered correctly when asked if their package holidays were Atol protected. But some agents provided misleading information when asked whether Atol protection applied if a flight and hotel were booked one week apart.
In this situation, while the flight might be covered by Atol if booked through a tour operator, the hotel and transfer would not be. But all three agents for Teletext Holidays incorrectly implied customers booking their flights and accommodation separately would be fully covered.
Which? is urging those considering a package holiday this summer to do their research, and read the terms of a company’s flexible booking policy carefully before booking.
All Which? Recommended Providers have committed to offering full refunds in the event of coronavirus related disruption, and all abide by the Package Travel Regulations. Consumers should avoid companies that cannot guarantee to offer a full refund in the event of further disruption.
The consumer champion is also campaigning for major travel industry reform to ensure greater protection of travellers’ money and enforcement of their existing consumer rights when they book a holiday or a flight.
The CAA has launched a consultation on reforming Atol protections and the protection of customer money which the consumer champion will be submitting evidence to. Meanwhile the CMA is also currently investigating refunds in the package holiday sector, and it should not hesitate to take enforcement action against any companies that continue to break the law on refunds when mass international resumes.
Rory Boland, Editor of Which? Travel, said: “Holiday companies are quick to offer promises that you can book with confidence this summer, but unfortunately many of them won’t be so quick to refund your money if coronavirus prevents you from travelling – and that’s if they refund you at all.
“Whether you can book with confidence ultimately comes down to who you book with. Many of the companies that broke the law last year have suggested they may do so again, so regulators must be ready to take strong action against any operators found to be misleading their customers or breaking the law.
“Travellers considering a holiday this year should only book with companies that guarantee in their flexible booking terms that they will be able to get all of your money back if lockdowns, quarantine and other disruption should strike.”