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Published on Thursday, May 21, 2020

Competition probe extended to package holidays

The Competition and Markets Authority's Covid-19 Taskforce has extended its investigation to package holidays.

Its investigation had previously focused on holiday accommodation, weddings and events, nurseries and childcare, but on Thursday the CMA said: "Based on the number and nature of complaints being received, package holidays has now been included in the scope of the investigation."

The consumer watchdog said around three-quarters of cancellation complaints it has received to date relate to holidays and air travel.

Between March 10 and May 17 it has been contacted more than 60,000 times about coronavirus-related issues. In the week to May 17, cancellation complaints were being received at a rate of 850 per day on average.

"With summer holiday season approaching, the potential harm to consumers from companies failing to respect consumers' cancellation rights is set to grow," it said.

The CMA said consumers have raised concerns about 'firms refusing to provide refunds, introducing unnecessary complexity into the process of obtaining refunds, charging high administration or cancellation fees, and pressuring consumers into accepting vouchers instead of cash refunds'.

Complaints about airlines, representing around 20% of all cancellation complaints, have been passed to the Civil Aviation Authority.

Kane Pirie, the creator of the Right To Refund campaign, said the CMA's decision to widen its probe will be bad news for ABTA and many of its members who have been 'flaunting the law since March'.

"Hopefully this day marks an end to the wild west and a return to sanity. We now expect refunds to flow as the missing billions are suddenly available. The CMA can impose crippling fines. You cannot ignore the CMA," he said.

ABTA said it supports the CMA's stance on refunds but said 14 days was virtually impossible.

It had previously insisted the CMA would not be investigating package holidays.

Rory Boland, editor of Which? Travel, said: "The CMA's decision to include package holidays in the scope of its investigation into cancellations and refunds is a positive step, given the huge number of customers that are being left out of pocket by operators openly breaking the law on refunds.

"Many holiday companies also continue to push refund credit notes onto customers, without making it clear when they are legally entitled to a cash refund and with no assurance from the government that these are financially protected, further adding to confusion from consumers around if and when they will ever see their money again.

"The regulator must be ready to come down strongly against any package holiday provider unnecessarily delaying or denying refunds for cancelled holidays, to ensure that passengers have their money returned to them swiftly and trust in the industry is restored."

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