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9 Apr 2020

Coronavirus: Travel agents breaking the law by refusing or delaying cancelled package holiday refunds

Customers left desperate as STA Travel, LoveHolidays and Tui refuse to refund, insisting they are following Abta advice

Which? Travel has been contacted by dozens of STA Travel customers who say the travel agent has told them it won't refund cancelled package holidays. Instead, they were told to rebook or accept a credit note. The amounts involved are often thousands of pounds.

Customers of Loveholidays, the fifth biggest travel agent in the UK, have also been told they can only rebook, accept a credit note or claim a refund in four months' time.

That's despite the Package Travel Regulations legally entitling customers to a full refund from their tour operator within 14 days.

Both Loveholidays and STA Travel are members of Abta, and when approached by Which?, claimed that their refusal to issue a refund or delay one, was based on Abta guidance.

Tui, which is also an Abta member, has cancelled all of its holidays up to and including 14 May. But it has told Which? that it will not be issuing refunds, only rebooking.

Find more unbiased advice on travel and the coronavirus, award-winning investigations and legal advice on holiday refunds and cancelled flights with Which? Travel

STA points to Abta advice on refunds

Stacey Brook booked her package holiday to Sri Lanka with STA Travel in January for £1,485. In mid-March, she was told by STA that the trip was cancelled. She requested STA refund her, but was told 'no refunds are permitted at the moment, as per the supplier's policy'.

She was told that she could claim a credit note or book for a later date. The latter option included a warning that she would be liable for any fare or tax difference.

Stacey complained to STA Travel, pointing out the terms of her contract, which stipulated a refund within 14 days if the holiday was cancelled. It refused again, saying its policy of no refunds was 'in line with Abta advice'.

We asked STA to explain why it was breaking the Package Travel Regulations. It said: 'Abta is highlighting that customers may be offered a Refund Credit Note instead of an immediate cash refund, which can be used to book another holiday at a later date and, in the meantime, it is protected by Abta/Atol.'

Loveholidays offers half a credit note or a refund in August

When Jessamy Worms asked her travel agent, Loveholidays for a refund of the £814 she paid for a trip to Morocco, she was also refused. Instead, she was told to rebook or accept a credit note for £399.28 - less than half the price she paid for the holiday.

She too complained, but was told those were the only options available and that Loveholidays was 'following Abta's advice'.

After complaining again, she was told that the credit note could be used to claim a refund after 31 July, but that would be for £399.28, which was the cost of her holiday minus the airfare. She was told to claim this back separately from the airline.

When Which? contacted Loveholidays it confirmed that credit notes had the airfare deducted from them, but said it was pursuing refunds for flights on behalf of customers and that these would be refunded 'in full, in cash as soon as it is received from the airline'.

It insisted it was following Abta guidelines in not issuing refunds within 14 days. It said: 'Customers can exchange the credit note for a cash refund after 31 July 2020, which is the date currently specified by Abta.'

Tui allowing refunds for cancelled holidays

The UK's largest travel agent and tour operator has cancelled all holidays up to and including 14 May. It initially told us it was not giving customers refunds and that they must rebook, but after Which? criticised the decision Tui amended its policy.

While Tui customers with cancelled holidays can now claim a refund, it is difficult to contact the company.

What is Abta saying about package holiday refunds?

The Abta guidelines that STA Travel and Loveholidays directed us to confirm that Abta is advising members that credit notes may be used in place of refunds. These guidelines say customers can claim a cash refund after 31 July.

Which? asked Abta why its guidance is in breach of the Package Travel Regulations. It said: 'Abta's guidance does not breach the Package Travel Regulations. It sets out a series of options for customers to discuss with their travel providers. One of those options, that their travel provider may or may not offer them, is a Refund Credit Note.'

'This guidance is to support a pragmatic discussion between customers and members who are unable to comply with the precise wording of the Regulations in this crisis, in relation to the 14-day cash refund rule.'

Does Abta's advice mean I have to accept a credit note for cancelled holidays?

No. Abta is a trade body set up to represent its members. Its advice doesn't change the rules of the Package Travel Regulations.

Abta is currently lobbying the government to formally change the rules of the Package Travel Regulations to allow travel agents to legally issue credit notes rather than refunds.

For now, customers retain the right to a cash refund.

Read your rights under the package travel regulations

How can I get a refund for my package holiday?

While the rules remain the same, many companies are ignoring them and you may need to be practical about the best way to get your money back.

If you can, consider rebooking for a later date. Travel agents and operators are facing a complete loss of business. The unprecedented pressure to refund so many bookings is pushing some providers to the brink of bankruptcy. So long as you have purchased a package holiday and have an Atol certificate, your money will remain protected - even if the firm does go bust later, you will get your money back.

While you're legally entitled to your money back within 14 days, consider allowing the holiday provider more time if it asks. Abta told us that reason many travel agents can't repay is because customer money is already with airlines or hotels who, in turn, are refusing to issue refunds. If you can wait until 31 July for your money back, do.

Not everybody can or wants to wait. We've heard from many people whose financial circumstances have dramatically changed since booking the holiday as a result of the coronavirus crisis. Try explaining this to the holiday provider.

If your provider continues to refuse a refund, skip reporting them to Abta. It has said it won't take enforcement action against its members in regards to complaints about coronavirus-related refunds.

Instead, consider using a Section 75 or chargeback through your card provider. Most holiday contracts will clearly indicate what is supposed to happen in the event of a cancellation. If this is a refund and the provider is refusing, you can approach your card provider and demonstrate the contract has been breached.

Read more about how Section 75 and chargeback works

Tour operator vs travel agent

You'll need to make sure you are claiming from the right company as well. This will usually be the company that sold you the package. It is in the case of Loveholidays and STA Travel, but there are exceptions.

Loveholidays and STA Travel, like many of the larger holiday companies act as atravel agent (they sell you the holiday) and tour operator (they actually provide the holiday).But some travel agents only sell packages put together byothertour operators - and in this instance it is the tour operator that you need to approach for a refund.

The easiest way to understand who you should be claiming from is by checking the Atol certificate. It will say 'who is protecting this holiday'.

Are all travel agents refusing refunds for coronavirus cancellations?

No. Trailfinders is encouraging customers to rebook, but honouring all refund requests. Read our review of Trailfinders.Which? has not rated Kuoni or Vivid Travel, but customers of both firms have confirmed they've been able to claim refunds.

On the Beach, one of the UK's largest package operators, has confirmed it is offering cash refunds, although it's asking customers to wait for it to receive airline refunds before it passes this part of the payment on. Wildlife holiday specialist, Naturetrek is issuing refunds on the same basis.

Read the latest coronavirus news and advicefrom Which?