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11 Sep 2020

Flight cancelled: can I get a refund from my credit card?

Passengers struggling to receive refunds from their airline, resort to credit card claim. We ask the banks, will it work?

Some people whose flights have been cancelled during the coronavirus crisis are getting money back from their credit or debit cards, after their airline has refused to refund them.

However, passengers are not getting consistent advice from banks on whether credit card claims will be honoured. And some customers say that their bank has told them it won't help.

The law - Section 75 legislation - says that credit card providers may be liable when a product or service is not provided, if you've paid more than £100 and less than £30,000.

But it may not be enough if you simply can't get hold of your airline, or it is being evasive.

Banks confusion on credit card claims

Ryanair passenger, Laura Smith, says she tried claiming a refund from the airline, but didn't receive a response. When she tried calling her card provider, M&S Bank, she was told that Ryanair was not in breach of contract and it was unable to help with a claim.

It was only after we got in touch with M&S that it said it may be able to help in some circumstances. Ultimately she did get a full refund from her bank card.

Another passenger, Calum Chace, tried to get a refund from easyJet, but after failing to do so he turned to his credit card provider, Amazon.

He says: 'I had a conversation with the call centre adviser and she told me categorically that they were instructed at the start of the coronavirus crisis to insist customers negotiate exclusively with the vendor.'

We asked Amazon if this was the case. It told us that it was New Day, the issuing bank for the Amazon card, that would be responsible for any claim.

The law on credit card refunds

On the face of it, the law seems clear for those who pay for a service, on a credit card, that costs more than £100 and less than £30,000. When a company is in breach of contract and doesn't provide a refund, the credit card company is equally liable. You're able to claim the money back from the card provider, which will then chase the company that should have supplied you with the service.

But it's unclear whether airlines cancelling flights constitutes a breach of contract. Their terms and conditions are carefully worded, and allow them a great deal of leeway in terms of changing schedules and cancelling flights.

How to make a claim

Which? Legal is advising members that it is worth trying to get a refund from your credit card when there is no other option.

Some banks have supported this view. M&S Bank told us: 'In order to progress a chargeback, or a claim under Section 75, customers are encouraged to contact their airline or travel provider as they may receive a refund or suitable alternative. If a refund or alternative isn't offered, customers should contact us and we will be able to support with making a chargeback and/or a Section 75 claim.'

We received a similar response from Lloyds Bank, while other banks such as Virgin Money told us that they would look at claims on a case-by-case basis.

What should I do if I can't get a refund from my airline?

If the airline absolutely won't refund you and you paid by credit card, then there's no reason not to make a claim on your credit card. While this is not the guaranteed way to get your money back that some sources claim, it won't cost you anything and is worth a try. There is advice on how to go about it and an online form to use here.

If you are unhappy with your card provider's response to a Section 75 claim then you can take it to the Financial Ombudsman.

If you paid by PayPal, you can try to dispute the payment, although it's important to be aware that if the airline disagrees you have a right to a refund, it could later challenge you to pay it back.

If you don't receive a reply to a request for a refund within eight weeks you can also escalate it to an adjudication scheme. EasyJet, Air France-KLM and numerous other airlines are members of AviationADR. British Airways are members of CEDR. Ryanair and Jet2 are not members of any scheme so you'd have to make your claim to the Civil Aviation Authority (CAA).

Travel insurance is another avenue worth trying. If you bought your insurance before the current crisis began and you're covered for travel disruption, then you may be able to make a claim. Find out more about coronavirus and travel insurance.