Earlier this year, thousands of Britons had their holiday plans cancelled due to the coronavirus pandemic, leaving some holidaymakers out of pocket. Many travellers were offered the option to take a cash refund or accept a refund credit note or voucher for the value of their trip. The CMA has pointed out that consumer protection law requires refunds to be issued within 14 days – which many were not.
Now TUI, the UK’s largest package holiday operator, has said that it will make refund payments for trips and holidays which were cancelled because of coronavirus by the end of the month.
The CMA revealed that it had received thousands of complaints from passengers who had been waiting weeks for their refunds, claiming travel firms were withholding their cash.
TUI has also said that they will be writing to any customers who have credit notes and make it clear to them that they are entitled to a cash refund.
However, some companies have struggled to return cash to customers, with many spending the money to cover overheads and pay down loans in a debt-heavy sector.
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The CMA said TUI’s UK division has engaged constructively throughout the investigation.
It added: “While the vast majority of people have already received their refunds or rebooked during the CMA’s investigation, any outstanding refund requests for people who had their package holiday cancelled as a result of coronavirus (COVID-19) will be paid by September 30 2020.”
Travel firms have faced the majority of complaints over poor customer practices since the CMA said it would investigate any business trying to take advantage of the pandemic to either hike prices or withhold refunds.
During the height of the pandemic, the CMA revealed four out of five complaints it received related to cancelled holidays and trips.
Many of the complaints stemmed from travel firms reportedly automatically offering vouchers instead of cash refunds.
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The CMA commented on TUI’s decision, saying: “It is important they (customers) know they are entitled to a cash refund as an alternative.”
TUI will be expected to regularly report to the CMA over the next year to update on the repayments.
These commitments apply to all of TUI UK’s different businesses that offer package holidays, which include First Choice, First Choice Holidays, Marella Cruises, Crystal Ski, Crystal, Tui Scene, Tui Lakes & Mountains and Skytours.
The move follows letters sent by the CMA to over 100 package holiday businesses to remind them of their legal obligations to give back customers’ cash.
It added: “The CMA understands that the pandemic has created extraordinary pressure for travel companies, including TUI UK.
“However, customers who had their holidays cancelled due to coronavirus must be treated fairly and receive their refunds promptly.
“It is essential that that all businesses comply with consumer protection law so that people are not being left out of pocket.”
The CMA published guidance for businesses earlier this year to help them understand their legal obligations.
Andrea Coscelli, the CMA’s chief executive, added: “The CMA is continuing to investigate package holiday firms in the context of the COVID-19 crisis.
“If we find that businesses are not complying with consumer protection law, we will not hesitate to take further action.”
A spokesman for TUI said: “We remain sorry that holiday refunds took longer to process during the height of COVID-19.
“The volume of cancellations and customer contacts was unprecedented, and at a time when retail stores, contact centres and offices were closed because of the nationwide lockdown.”
She said the firm had “worked tirelessly” to improve its systems.