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5 May 2021

Undercover investigation finds holiday companies may break law on refunds again

Mystery shop finds companies that broke the law last year may do so again

Some of the UK's largest holiday companies told Which? Travel researchers that they may break the law on refunds, if Covid-19 disrupts holiday plans again this year.

Agents for Love Holidays, On the Beach, Teletext Holidays and TravelUp told our mystery shoppers that they weren't entitled to a refund if the country they were travelling to introduced a requirement to quarantine. Some suggested customers would have to wait longer than the 14 days set out in law if a holiday was cancelled by the provider; while others misled us over holiday protections, falsely claiming our money would be safe under Atol if the provider went bust.

Which? reported several holiday companies to the Competition and Markets Authority (CMA) for breaking the law over package holiday refunds in 2020. Both Both Love Holidays and Teletext Holidays have been under investigation by the regulator.

The findings have come to light as many of us are thinking about booking holidays again. This week the government is set to unveil its green list of countries that travellers can visit without quarantine restrictions.

Read more about the traffic light system in our Q&A.

Can you book holidays with confidence?

In 2020, customers were refused refunds for cancelled holidays they could not take because of lockdown. Millions had to battle for months to get their money back. Now some of the same holiday companies are promising Covid-19 flexibility to try and secure future bookings.

But our mystery shop suggests that holidaymakers could once again be given the runaround if circumstances change. Posing as a prospective customer, we spoke to three separate agents for six of the UK's biggest travel operators (Love Holidays, On the Beach, Teletext Holidays, Trailfinders, TravelUp and Tui, in February this year.

Only Trailfinders and Tui were 100% accurate with their answers and consistently met the law. Elsewhere agents misled us over our financial protections in the event of another national lockdown or quarantine measures being introduced at our destination.

What happens if you have to quarantine on arrival?

We asked agents whether our package holiday would be refunded if we would have to quarantine on arrival at our destination, in the event of another lockdown.

Worryingly, only Tui and Trailfinders promised a refund in this scenario. That's despite the Package Travel Regulations stating that customers must be offered a reasonable alternative or a refund if an 'unavoidable and extraordinary circumstance' will significantly affect the performance of their package holiday. Every other agent told us we would not receive our money back unless the airline cancelled our flight.

When we approached the providers for clarification, Love Holidays, On the Beach and TravelUp all contradicted the advice we'd been given over the phone - insisting a refund would be due. So why did their sales reps consistently get it wrong?

TravelUp told us that our calls may have 'overflowed' to the wrong team because of the volume of calls it was receiving. A spokesperson added: 'We welcome the feedback and will undertake a fresh programme of cross training to ensure all of our sales team effectively communicate the latest package holiday refund rules.'

Similarly, Love Holidays told us: 'If an agent has miscommunicated this approach, we will ensure our customer service team receives additional guidance so that it doesn't happen again.' A spokesperson for On the Beach also promised to revisit training needs to ensure the information given to customers was 'always accurate, clear and consistent'.

Thinking of booking a holiday? See our eight dos and two don'ts for booking during the Covid-19 crisis.

Refund if there is another UK lockdown

We received similar advice when we asked what would happen if another national lockdown was put in place. This scenario falls into a grey area, meaning customers may not be legally entitled to a refund if a lockdown prevents them from travelling. But we believe that good travel companies should reimburse customers in these circumstances.

Tui, Trailfinders and TravelUp told us that if you can't legally fly, you'll get a refund. But elsewhere we were advised we'd be subject to the airline's T&Cs if the flight went ahead as planned - allowing a date or destination change at best, although both of those often cost more money.

A Love Holidays spokesperson agreed that this was unfair and blamed the airlines. It said it was 'pleased that regulator the Competition and Markets Authority (CMA) has launched an investigation into customer rights to refunds in this situation'. However, the provider continues to deny refunds on this basis.

Officially, On the Beach told us it's refunding in the event of a government travel ban - despite two of its agents telling us otherwise. Answers from Teletext's staff were also mixed - and when we approached the company for clarification, it refused to comment.

Holiday company refunds for changing traffic lights

Woman on the phone distressed
If the operator cancels the holiday, it must refund you in full within 14 days. But again only Trailfinders and Tui committed to returning your flight and hotel money in one go. Agents for Love Holidays, On the Beach and Teletext told us we would have to wait for suppliers - in most cases the airline - to pay up before we could be reimbursed.

Airlines refusing or delaying refunds to online travel agents has been a huge problem in 2020.

Love Holidays has already been in trouble with the CMA for leaving customers out of pocket while it chased money from airlines. It was ordered to pay £18m by March this year or face court action.

Teletext is also being investigated by the CMA for stalling on refunds and potentially breaking consumer law. Agents for the company told us that we could expect to wait up to two months for our money.

Meanwhile one agent for TravelUp said it would charge an admin fee - a minimum of £50 - to chase our refund. He explained: 'We're almost acting as your solicitor. We will deal with the suppliers on your behalf.' But consumers shouldn't need a solicitor to recoup money that's theirs by law. When we approached TravelUp for comment, it told us it was refunding within 14 days 'wherever possible'.

Will my holiday be Atol protected?

Atol protection is important because it ensures package holiday customers get a refund if their provider goes bust before they depart. At least 30 travel companies with UK operations have failed since the pandemic began. With many more facing uncertain futures, this protection is crucial.

Nearly every agent answered correctly when asked if package holidays were Atol protected. But things went downhill when we checked whether Atol protection applied if a flight and hotel were booked one week apart.

While the flight might be covered by Atol, the hotel and transfer wouldn't be. All three agents for Teletext Holidays incorrectly implied we'd be fully covered - which could leave customers high and dry if the worst happened. When we approached Teletext, it declined to comment.

Looking for an agent you can trust? We have monitored and continue to monitor Which? Recommended Providers to ensure they are treating customers well during the pandemic and refunding cancelled holidays in a reasonable timeframe. See the results of our best and worst package holiday providers