Thursday 21 May 2020 8:00 pm

Coronavirus: CMA investigating holiday firms over refund claims

The UK’s competition watchdog is investigating package holiday firm’s over their failure to refund customers for cancelled holidays.

According to its latest statistics, the Competition and Markets Authority (CMA) has received over 60,000 complaints from customers regarding the coronavirus crisis since 10 March.

Read more: Public trust in airlines and travel firms at record low, says Which?

Of these, it said that 27,000 related to complaints about “unfair practices” related to holiday refunds, mostly directed at package holiday firms and airlines.

As a result, the CMA said it had added package holiday operators to the list of sectors it was investigating.

In April, consumer rights group Which? said that customers were seeking a total of £7bn in renumeration in such firms.

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Legally, holiday firms are obliged to give customers a cash refund within 14 days if they cancel a holiday, while airlines have seven days.

However, many in the sector have warned that due to the sheer number of refund requests they are facing, businesses are at risk of going bust if they are forced to pay out all the refunds at once.

Instead, some firms are offering customers refund credit notes or vouchers for future rebookings.

Read more: Travel industry calls on government to extend refund payment timetable

Sector bodies such as ABTA have been lobbying the government to provide clarity on whether the alternatives are acceptable.

Which? reported yesterday that public trust in the sector had slipped into the negative on its tracking scale for only the second time on record due to the situation.