Over the past few months, we have written several articles about the problems consumers have had obtaining refunds for covid-related cancellations – whether in the travel sector or elsewhere. Every week newspapers feature a story of someone struggling to get the refund due to them. Some airline websites are set up so that you can only obtain a credit for a future flight online and have to telephone for a cash refund – and call centres are busy and consumers may have to try multiple times to speak to someone.
It appears that the CMA has finally decided enough is enough, and is investigating whether airlines have breached consumers’ legal rights by failing to offer cash refunds for flights they could not lawfully take. It is part of its ongoing work regarding holiday refunds during the pandemic.
The investigation will consider situations where airlines continued to operate flights despite people being unable lawfully to travel for non-essential purposes in the UK or abroad, for example during the second lockdown in England in November.
The CMA is aware that, in some cases where flights were not cancelled, customers were not offered refunds even though they could not lawfully travel. Instead, many were offered the option to rebook or to receive a voucher.
The CMA recognises that the airlines sector, like many others, is under strain due to the pandemic. However, it is concerned that certain airlines may have breached consumers’ legal rights by failing to offer cash refunds, leaving people unfairly out of pocket, and has therefore opened an investigation to examine the matter further.
As the Civil Aviation Authority is the lead regulator for airlines, it will be working closely with the CMA as it progresses its investigation. The CMA will now be writing to a number of airlines requiring information to understand more about their approaches to refunds for consumers prevented from flying by lockdown. Once it has considered the evidence, it will decide whether to launch enforcement action against individual airlines.
It remains to be seen whether the CMA’s action will encourage airlines to ensure that refunds are now expeditiously provided. Its investigation comes as the European consumer association BEUC published a report on the EU’s voucher scheme. In May, the European Commission published a Recommendation on vouchers, aiming at making the offer of voluntary vouchers attractive for consumers without depriving them of the right to a refund. However, BEUC says that member states have not implemented it sufficiently well. This issue is likely to run for a while.
Andrea Cascelli: “We recognise the continued pressure that businesses are currently facing, but they have a responsibility to treat consumers fairly and abide by their legal obligations”