Holiday firms must refund customers fairly if they cancel due to illness or a death in the family, watchdog urges
Travel companies are being urged to make their cancellation policies clearer to customers
TRAVEL firms will have to refund customers fairly if they have to cancel their holiday due to an illness or death in the family, a consumer watchdog has warned.
Holiday companies are allowed to charge customers a cancellation fee to cover their losses but they amount must be proportionate.
So, for example, if a holiday is cancelled last minute, they may be able to hold back the costs that it takes to resell the booking.
But some holiday firms withhold large upfront deposits for cancellations or refuse to hand back any cash to customers regardless even if the company is able to recuperate costs by selling the holiday on.
The Competitions and Markets Authority (CMA) says that cancellation costs often aren't clear enough for consumers who may not realise how much cash they must forfeit when they cancel due to illness.
Up to 89 per cent of the 2,000 people surveyed by the CMA wrongly believed they would be refunded all costs by the operator if the firm manages to resell the holiday.
What should you look for in a good travel insurance policy?
TRAVEL insurance policies can vary a great deal, but here are some 'must have' features you should look out for from the Money Advice Service.
- Medical expenses - A good policy will give cover of £1million or more for travel in Europe and £2million or more for the USA
- Repatriation service - The costs of getitng you back to the UK for medical reasons should be covered automatically by your policy
- Cancellation and curtailment - A good policy will cover you for £2,000 or more if you have to cancel or shorten your holiday
- Missed departure - Covers additional accommodation costs and travel expenses up to 500 or more if you miss your flight due to circumstances out of your control
- Delay - You'll be covered for £200 or more if your travel plans are delayed due to circumstances out of your control
- Baggage cover - Covers you if your baggage is lost, damaged or stolen. Look for policies that have cover of £1,500 or more.
Meanwhile, 66 per cent say that travel companies don't always make it as easy to cancel a booking as they should.
Agencies are now being urged to update their policies to make the fees more obvious to consumers as part of its Small Print, Big Difference campaign.
UK holidaymakers spent an estimated £81billion on trips at home and abroad in the 12 months to April last year.
You may be able to claim funds back through your travel insurance if you've had to cancel your holiday due to unforseen circumstances.
As long as you didn't know about an illness that may prevent you from going on holiday when you booked it then you may be able to get your money back.
You'll need to provide evidence such as a death certificate or a doctor's note to the insurance company before they consider your claim.
But a small print crackdown would put the responsibility of refunds at the feet of the operators first.
Do I need travel insurance if I have an EHIC card?
THE EHIC entitles Brits to free or discounted medical care when on holiday in all 28 EU countries, as well as Iceland, Liechtenstein, Norway and Switzerland.
But while EHIC is worth having for the extra protection - some insurers will waive any excess you have to pay if you use you use the card - you shouldn't totally rely on it.
Even with the card, you might have to pay for some of your medical bills if that's how the local system works, and it won't cover the costs of getting you back home if you are taken very seriously ill when you're abroad - which can be extremely expensive.
You can apply for an EHIC card for free by the card needs to be renewed every five years.
Paul Latham, the CMA's director of strategy and communications, said the changes would make sure that customers are "treated fairly".
He said: "Unfair terms can't be enforced so they also won't protect businesses if challenged. The small print really can make a big difference."
Association of British Travel Agents (ABTA) chief executive Mark Tanzer said: "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."
Rory Boland, travel editor at Which? said "it's time for travel agents to up their game."
He added: "If they continue to fail to treat their customers fairly, the CMA should not hesitate to take the enforcement action needed to stop people from getting ripped off."
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It's always best to take out holiday insurance as soon as you've booked it to make sure that you're covered in case anything goes wrong.
We've put together a roundup of the best cheap travel insurance, where you can get cover for a year from £9.
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