Consumer Watchdog warns over travel losses
Which? is warning urgent action is needed to protect consumers who face losing large sums of money amid a breakdown of the system of travel protections.
The consumer champion has been inundated with messages and requests for help from people who face losing large sums – with some airlines and package travel providers refusing to meet their legal obligations to issue refunds for cancelled flights and holidays.
While Which? supports the government exploring options to help the travel industry, it is demanding that the crisis not be used as an excuse to undermine consumer protections. Reports of some package providers refusing refunds running into thousands of pounds in expectation of changes to the law are unacceptable.
Which? has heard from a family who were meant to be travelling to a wedding in Italy and whose flights have not been cancelled, despite Foreign Office (FCO) guidance against going to the country hardest hit by the virus.
Instead, the airline is offering to switch their flights to more expensive ones in the future. In some cases this can cost as much as £100 more per person.
The consumer champion has also been contacted by unhappy airline customers who are being offered vouchers instead of being refunded, with many complaining that they have received no clear guidance from their airline about what the next steps will be.
All flights on EU carriers in or into the EU and all flights leaving from an EU airport are protected by the EU’s Denied Boarding Regulation, which requires refunds or rerouting when flights are cancelled.
People have also been in touch reporting that their travel agents are refusing to offer refunds for cancelled holidays, despite travel regulations. Dozens of holidaymakers due to travel to France in the coming weeks have told Which? that their travel agent is refusing to issue a refund.
One customer was refused a refund for his holiday with a well-known beach holiday specialist. The customer faces losing £2,300 and the only options being offered are a credit note or rebooking. And, that if he decided to cancel instead, he would have to try to claim on his travel insurance.
The law says you are entitled to a full refund if your package holiday is cancelled because of extraordinary circumstances at the destination – so you do not have to accept a credit note.
Faced with these difficulties, many people are finding themselves pushed from pillar to post between airlines, tour operators and insurance companies – whose policies are not set up for providers failing to fulfill their duties in this way.
Which? has also heard from holidaymakers who have fallen foul of little-known exclusions in insurance policies – meaning they were not covered for cancelling an upcoming trip, even after the FCO advised against travel to their destination.
Many more people are concerned that they will be uninsured for upcoming trips booked well before the coronavirus outbreak as insurers make sudden changes to their policy terms and conditions.
Taken together, these issues represent a serious breakdown of the current system of travel protections, which is vital to ensuring millions of consumers have the confidence to book expensive holidays and flights abroad.
Urgent action is needed to protect consumers amid the crisis in the travel industry. It is vital that any emergency measures under discussion, such as credit notes replacing refunds for package holidays, include strong guarantees or protections so consumers know they are not at risk of losing their money if a travel firm fails.
And while consumers with holidays booked under the current regulations may choose to accept a credit note, their right to claim a refund must not be taken away retrospectively by any changes to the law. The hard-earned money of thousands of holidaymakers – who may be facing difficulty themselves – must not be used as a backdoor bailout of the travel industry, when direct government support is being used in other sectors.
While the current uncertainty continues, airlines must respond swiftly to this fast-moving situation by informing passengers about what is happening with future flights, and show flexibility with rebooking options if a flight has not been cancelled.
Insurers must also heed last week’s warning from the FCA about treating customers fairly and work with the government and travel industry on solutions to tackle the coronavirus crisis, as the public must have confidence that they will be covered when they travel.
Rory Boland, Which? Travel Editor, said:“We’ve heard from hundreds of people who face losing large sums of money because their travel plans have been left in tatters or they have been abandoned abroad and face extortionate bills to get home.
“It’s vital that the government, insurers and the travel sector work together to tackle the huge challenge posed by coronavirus, as the travel industry depends on people having confidence that they will be protected in times of crisis.”