LoveHolidays to refund customers following CMA intervention
At the start of 2020 no one envisaged a pandemic such as Covid -19 nor the impact it would have on individuals and multi million pound corporations alike.
The travel industry has been hit hard, with millions unable to travel and a tide of cancelled holidays behind them.
Under the Package Travel and Linked Travel Arrangements Regulations (PTR 2018), known as the Regulations, where a tour operator cancels a package holiday, then a refund for the cost of the holiday should be paid within 14 days.
Those Regulations have always been designed to assist the customer, and were "beefed up" in 2018 to help the man in the street.
However not all tour operators nor travel companies who provided a "package'' which was then cancelled because of the pandemic, have made refunds in accordance with those Regulations, either in a timely fashion and in some cases at all.
Some have employed lawyers to produce generic letters which those companies have used to send to their customers suggesting in some cases that a refund was not due at all or in full, and also indicating that the Regulations simply did not apply in relation to such cancellations because of the pandemic through which we are all living.
One of the companies who have been very slow to refund is LoveHolidays, one of the UK's fastest growing travel firms and in 2018, listed sixth in the top ATOL holders.
Due to the devastation caused by the Covid-19 pandemic, millions of LoveHoliday's customers have been left struggling to secure refunds for their cancelled package holiday.
LoveHolidays at one stage advised their customers that they could only rebook their holiday, accept a credit note or claim a refund some months down the line. However, as a booking company, they should also have offered a cash refund within 14 days as per the Association of British Travel Agents guidelines, EU regulation 261/2004 and the Package Travel Regulations.
Certainly at the time the pandemic hit, LoveHolidays and other tour operators were and are under a legal obligation to process refunds where requested. Of course, they could be forgiven for not adhering to the 14 days deadline given the pressure they were under in these unprecedented circumstances, but not to refund for months and months meant that the Competition and Markets Authority (the CMA) became involved.
There was, we are told a huge number of complaints made to the CMA from LoveHolidays customers and the CMA have now concluded that LoveHolidays must refund over £18 million to 44,000 customers.
Following CMA intervention, LoveHolidays has now signed formal commitments – known as undertakings – that ensure these customers receive all their money back. Of this, so far £7m has been refunded to 20,000 customers.
There is also a detailed format for the timeline under which refunds will take place further details of which are available online.
It appears that the CMA has written to over a hundred package holiday firms reminding them of their obligations to comply with laws designed to protect consumers. The CMA has already secured refund commitments from Lastminute.com, Virgin Holidays, TUI UK, Sykes Cottages and Vacation Rentals.
It is of course really important for businesses to treat consumers, including those following government guidance, fairly and responsibly; and businesses should remember that if they mislead consumers about the effects of lockdown laws or guidance, or put pressure on consumers not to comply with them, then this may well infringe consumer protection law.
Bronwen Courtenay-Stamp and Mandy Stroud
Bronwen leads the travel tourism and insurance team and has over 30 years' experience in the travel and insurance sector.
Mandy deals with foreign personal injury claims as well as road traffic accidents and personal injury claims arising out of incidents in England and Wales.