The Competition & Markets Authority (CMA) has this morning issued a statement confirming that it is to investigate concerns about cancellation policies. The statement can be seen here: https://www.gov.uk/government/news/cma-to-investigate-concerns-about-cancellation-policies
The CMA says that it has seen increasing numbers of complaints in relation to cancellations and refunds and states that these now account for 4 out of 5 complaints. The statement calls out the three main sectors of concern:
“Based on the complaints received, the CMA has identified 3 sectors of particular concern:
• weddings and private events
• holiday accommodation
• nurseries and childcare providers..”
The CMA has also this morning issued a statement on its views on consumer protection law in relation to cancellations and refunds during the current crisis. This can be seen here: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/882088/Covid_refunds_guidance.pdf
The statement confirms my view of the legal position with cancellations of UK holidays. It states:
The situation with the likes of Sykes, Hoseasons, and all of the UK holiday contracts falls squarely within this.
The CMA does confirm that there will some exceptions. It states:
I totally agree with this, and this is in accordance with the views and advice I have already given. However, it is worth noting that nowhere does the CMA make reference to the trader’s ‘terms and conditions’, potentially creating an exception to refunds. As those affected will know, many traders have been hiding their terms and conditions and citing these as being a valid legal reason not to provide refunds “sorry you can’t have a refund as our terms and conditions say…”
The CMA has made clear its view on ‘non-refundable’ deposits and ‘admin fees’:
The CMA has also made clear its view on credits, vouchers and re-booking terms. Importantly, it has confirmed what all consumer lawyers already knew, that consumers do not have to accept a voucher over a cash refund.
Message to consumers:
The CMA’s statement should provide added reassurance that you are indeed entitled to a refund for holiday bookings that cannot take place, as I have been advising over the past few weeks.
However, it has been highlighted to me on social media that this whole situation is also bad for the property owners, many of whom are happy to agree to provide a refund, but are in the hands of the likes of Sykes. Some have informed me that they have experienced threatening and abusive behaviour from those seeking a refund. I do not advocate this behaviour or approach; Please be mindful of the situation the property owners are in and, where possible, work with them to reach an amicable solution.
If you can reschedule your holiday then please do so, not to help Sykes and others like them, but to help the property owners.
If you cannot, or do not wish to reschedule, the law clearly gives you the right to a refund. In these circumstances you have no option but to demand that refund from the property owner, as the law does not give you the right to chase the likes of Sykes, who merely acts as booking ‘agent’. However, when you are faced with a property owner who is agreeing to a refund, but must wait for Sykes to process the refund, work with them.
Message to property owners:
Communication is vitally important. If you communicate with your customers and tell them that you agree to the refund they are entitled to, it is likely they will work with you and be patient whilst Sykes, or the company that facilitated the booking, processes the refund.
Many property owners have said they will refund all monies save for the commission they have paid out. This is wrong; You are legally obliged to refund your customer ALL monies, save for reasonable expenses, as made clear in the CMA statement.
Message to Sykes and other holiday facilitators:
Help your property owners: by i) refunding commissions they have paid you; and ii) processing refunds swiftly on their behalf. These are your customers and it is time to show them some good customer service. My view is that you are entitled to keep your administration fee associated with the booking, as you finalised the steps of facilitating the booking, and thus provided your full service in this regard; The CMA statement supports this. However, keeping any more than this cannot be lawful.
No property owner should be taken to court over this and consumers should not have to endure the hassle of taking this step.
The CMA Investigation
I have offered to help the CMA with its investigation, to provide my view of the law, and insights into the issues consumers have been facing.