Competition watchdog calls on travel industry to make cancellation policies clearer

Published by Stephen Little on 17 April 2019.
Last updated on 17 April 2019

Holiday

The Competition and Markets Authority (CMA) is calling on holiday and travel businesses be fairer to customers who have to cancel because of an illness or bereavement.

While businesses may be entitled to ask customers to pay a cancellation fee to cover their losses under consumer law, the amount they keep must be in proportion to what they are losing.

The CMA says that cancellation terms that don’t follow this approach are likely to be unfair and businesses can’t rely on them to resolve claims or disputes with customers.

The CMA questioned 2,000 people and found that nine out of 10 felt they should get all, or most, of their money back if they cancel and the business re-sells their booking.

Some 85% felt that it’s unfair if they have to pay part of the cost of a booking when they cancel.

The poll also revealed that 66% felt that travel and holiday businesses do not always make it as easy to cancel a booking as they should.

Of those with experience of cancelling a booking, one in five felt that they had been treated unfairly

Unfair terms can include those which allow a business to take a large, upfront deposit and refuse to refund any of the customer’s money if they cancel, regardless of the amount the business is losing or the reason for the customer cancelling.

Paul Latham from the CMA says: “Nobody wants to cancel a trip or holiday, but if you have to, it’s important that you are treated fairly and don’t lose out more than is absolutely necessary.

“Our campaign is asking travel businesses to ‘check in’ on their terms to make sure they’re fair. Fair terms are a legal requirement as well as helping reassure customers that they’re dealing with a company they can trust.

“Unfair terms can’t be enforced so they also won’t protect businesses if challenged. The small print really can make a big difference.”

Brits spent an estimated £81 billion on holidays in the year to April.

If you think you have been hit with an unfair cancellation fee the first thing you should do is contact your travel company.

If this is not successful, you should then get in touch with your insurer as you may be able to claim if you had to cancel due to unforeseen circumstances.

You will need to provide evidence such as a death certificate or a medical certificate to be able to claim.

Mark Tanzer, chief executive of ABTA, says: “There are circumstances when a cancellation charge may apply, but it must genuinely reflect the costs of cancellations faced by the travel company. We always encourage people to take out travel insurance as soon as they book their holiday, which should protect them from the costs for most cancellations.”

 

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