Banks block ‘£7billion in holiday refunds’ leaving thousands of holidaymakers out of pocket due to Covid cancellations
BANKS have so far blocked billions of pounds worth of refunds from holidaymakers trying to get their money back from trips cancelled by the coronavirus outbreak.
Customers are entitled to a full refund of the trip within 14 days if their holiday is cancelled by the tour operator, or airline if the flights don't go ahead.
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It's estimated that Brits are collectively owed around £7billion from travel firms, with four in five complaints submitted to the Competitions and Markets Authority (CMA) being about travel refunds.
An investigation from Which? found that all 20 of the top travel firms, including TUI, Ryanair and British Airways, are flouting the law by issuing refunds outside of the two week deadline.
And what's more, travel operators have been slammed for handing out travel notes or a change of booking instead.
But many customers don't want to accept them over fears that they won't be able to use them again or that they become worthless if the company goes bust.
How to claim under Section 75
FOR purchases of between £100 and £30,000 made on credit card, your card provider is jointly liable if you don't get the service you paid for.
In this scenario, you could claim a full refund from your credit card provider for cancelled flights.
If your flights are yet to be cancelled, you'll likely need to wait until they are in order to claim, as from your card provider's perspective this service is still going ahead.
If you think you have a claim, contact your card provider directly - has a free tool that can help you do this.
You should make a claim within six years of buying the goods or services
Just bear in mind you'll need to claim for different transactions separately, for example if you paid for your flights and hotels separately.
One grey area to watch out for is goods paid through an agent, such as a travel agent, or a third party, as your card provider could argue it doesn't have a "direct relationship" with the supplier.
If your claim proves unsuccessful, you can take it to the free .
If they've been refused a refund, shoppers who paid using a credit card can claim the money back from their provider under Section 75 of the Consumer Rights Act.
These rights to claim kick in if there's been a breach in contract between the buyer and seller, such as if the goods or services that have been paid for were never delivered.
But now, Which? is warning that some credit card customers have been told by their provider that they're not eligible for a refund through the scheme.
Others have been told that their claim won't be processed until they've tried to get the cash back from the travel firm first, even though this isn't a legal requirement.
According to the latest research from Which?, some banks are also preventing credit or debit card holders from claiming a refund for purchases of under £100 through the "chargeback" scheme.
This isn't a legally binding service but one that's issued by your card provider.
If successful, the provider would contact the card company to get the money back from the travel firm's bank, meaning that the bank itself doesn't have to stump up the funds.
But Halifax, Metro Bank and RBS customers have been told they're not able to make a claim because they've been offered credit notes, even though these "rules" aren't laid out in the guidance from Mastercard or Visa.
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The consumer group says that the number of people using its free chargeback and Section 75 tools has soared to 100,000 since March, compared with 1,000 in January and February this year.
"While it is a very difficult time for businesses, the coronavirus outbreak has also put people’s finances under considerable pressure, and they deserve to get their money back if they want a refund for a cancelled event or trip, rather than a voucher or the option to rebook," said head of money at Which? Gareth Shaw.
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"There needs to be greater clarity and consistency about claiming through banks, and the industry should ensure that all bank customers have a fair chance of getting their money back."
A spokesperson for UK Finance, the trade body which represents the banks, told The Sun: "Paying with a credit or debit card can provide customers with additional protection if something goes wrong.
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"The circumstances under which a refund can be made may be complicated so we would always advise customers who are unable to resolve a complaint with the retailer, and have paid using their credit or debit card, to check with their bank, building society or card issuer."