Coronavirus: Are holiday letting companies using unfair terms to deny refunds?

Customers denied refunds for cancelled holidays with the UK's biggest cottage companies are potentially being penalised by unfair terms, Which? Travel has found.

Angry customers, who are unable to travel because of COVID-19, have struggled to secure cash refunds from providers including Sykes, Hoseasons and Cottages.com.

Many have reported being fobbed off with credit notes, or being charged hundreds of pounds extra to change the dates of their stay.

When we checked the contracts of five of the UK's biggest cottage letting companies, we found terms that we think could be challenged as unfair under the Consumer Rights Act.

We have passed our findings to the Competition and Markets Authority (CMA), the watchdog that has, this week, vowed to crack down on holiday refund refusals after a surge in complaints.

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Keeping customer money

Which? scoured the fine print of booking terms and conditions used by Sykes Holiday Cottages, Hoseasons, Cottages.com, English Country Cottages and Holidaycottages.co.uk. These companies act as intermediaries to arrange bookings between consumers and holiday cottage owners.

It found that four of the five had terms that could deny consumers a refund if an owner is forced to cancel because of circumstances outside of their control.

Which? is concerned that this potentially gives property owners the power to keep customer money - unless additional terms exist between owners and consumers that allow for a refund. Holidaycottages.co.uk was the only site not to include a term like this in its contract.

Hoseasons, Cottages.com and English Country Cottages (all owned by the same company) also tell customers that bookings are subject to the additional T&Cs of the property owner, which are available on request. Which? believes that if additional terms do apply they should be issued automatically. If they are not, this could also be unfair.

We have spoken to both owners and customers of Hoseasons and Sykes; neither knew about the existence of any additional terms.

CMA threatens enforcement action

The CMA says it will take enforcement action if there is evidence that companies have breached competition or consumer protection law.

The government watchdog is concerned about providers charging administration or cancellation fees and pressuring consumers into accepting vouchers instead of cash refunds.

It follows Which? Travel's findings that 20 of the UK's biggest airlines and travel agents are illegally withholding refunds from customers.

The CMA has reminded businesses that it would expect consumers to receive a full refund when:

• a business has cancelled a contract without providing any of the promised goods or services
• no service is provided by a business because of restrictions that apply during the current lockdown, or a consumer cancels or is prevented from receiving the service, due to the restrictions that apply during the current lockdown

It has also encouraged people who have been affected by unfair cancellation terms in the wake of COVID-19 to report the company to the CMA.

Hoseasons refuse refunds

Adam Kemp was due to stay in a cottage in Kessingland, Suffolk, with his pregnant wife and three-year-old daughter.

Hoseasons cancelled the four-day break on 23 March after the UK went into lockdown.

However, Hoseasons refused to refund the £270 that Adam had paid because he did not have cancellation insurance. But Hoseasons cancelled the booking, not Adam. Instead he was sent a voucher to be redeemed against a future booking.

He told us: 'Essentially they are strong-arming people to rebook whilst also asking them to cough up the difference if it is more expensive - which, lo and behold, it often is. Profiteering from a pandemic is incredibly poor form.'

A spokesperson for Hoseasons and sister brands Cottages.com and English Country Cottages told us they are offering customers 'price-matched breaks for the same or equivalent date in 2021, as well as refunds in appropriate circumstances'.

They added: 'Following the statement from the Competition and Markets Authority (CMA) we have now expanded the options available to support any customers who were due to travel with us during government-imposed travel restrictions and who prefer not to accept one of our vouchers.'

Sykes 'making up the rules as it goes'

Jessica Tappin was not initially offered a refund from Sykes Holiday Cottages when her £310 weekend break in Cornwall was cancelled.

Instead she was told to rebook and pay the difference for the new dates - anything between £250 and £1,000 extra.

After seeking legal advice, she has secured a partial refund. The remaining money - minus the £39 booking fee - will be issued as a credit note of around £53.

Jessica told Which? Travel: 'I'm not going to get very far with £53 - and I refuse to give Sykes any more money. Some customers have had a full refund so it seems they're making up the rules as they go along.'

A spokesperson for Sykes Holiday Cottages said: 'Where customers have been due to travel on or before 7 May 2020 and we have received the cottage owners' consent, we have issued thousands of customers with all funds returned to us by the owner of the property, paid directly to customers' original payment methods.

'If that refund does not match the price originally paid, as a goodwill gesture we have applied an ex-gratia credit to customers' Sykes Holiday Cottages accounts to represent the fees we have been paid by owners for facilitating these bookings. These can be used on any holidays departing within 24 months.'

Shadow business minister Lucy Powell said: 'These are very difficult times for the travel industry with real uncertainty about the future but it is absolutely unacceptable that holiday lettings companies are taking customers for a ride, and denying refunds where they are due.

'As many face loss of income, redundancy and savings disappearing, refunds for holidays paid are even more important.

'With no clear end to the lockdown, the Competition and Markets Authority must clamp down on unfair practices, and Government must strengthen support for the travel industry, which is a vital sector of the UK economy.