Agents are facing weeks without access to critical cash as they contest chargebacks issued for holidays already being refunded and insurance companies stall the claims process.

Affected agents say being hit by unnecessary chargebacks could determine the survival of some retailers over the next few months.

Spear Travels chairman Peter Cookson, whose miniple currently has £20,000 to £30,000 outstanding in chargebacks, said the process was fast becoming “utterly ridiculous and immoral”, with merchant acquirers routinely taking chargeback monies from retailers’ accounts despite clients having already been refunded.

“This is at a time when cash is king. Little amounts affect cashflow,” he said, noting “no communication at all” between merchant acquirers, banks and customers.

“I don’t see how, after we have proved [to the merchant acquirer] that we have given the money back, they can still take it,” he added.

Cookson said it typically takes weeks for banks to return contested monies to agencies.

Howard Davies, US sales and marketing director at Delmar World, blamed “mercenary” insurance companies for “passing the buck” and pushing clients to make chargebacks before they consider claims.

He said: “Cashflow is the biggest issue facing agents. Traditionally at this time of year it goes downhill.

“Chargebacks are a major threat to retailers but without legislation we have to live with it. Insurance companies are not facing their own obligations.”

Advantage Travel Partnership head of business development David Moon said a “high proportion” of members were likely to have suffered undue chargebacks. He added: “It depends when during the month the chargeback is raised whether the agent has that money debited from their account immediately or the following month.

“And if the agent is successful in opposing the chargeback, the monies will be returned to the agent’s account at the point the next statement is raised – this can be up to four weeks later.”

Moon urged agents to keep customers regularly updated, but admitted: “It’s frustrating when the agent is doing the right thing.”

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