A Covid-19 taskforce has been set up by the competition watchdog to probe complaints over “thousands” of cancellations and refunds across three sectors including holiday stays.

The Competition and Markets Authority (CMA) is to investigate reports of businesses failing to respect cancellation rights covering holiday accommodation, weddings and private events and nurseries and childcare providers.

“The taskforce has seen increasing numbers of complaints in relation to cancellations and refunds, which now account for four out of five complaints being received,” the CMA confirmed today.

Concerns include people “being pressured to accept vouchers for holiday accommodation which can only be used during a more expensive period”.

In most cases, the CMA said it would expect a full refund to be offered if:

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

The CMA acknowledged that most businesses “are trying to do the right thing in these unprecedented circumstances”.

But, at the same time, ordinary consumers deserve to have their rights protected, it added.

The CMA said: “It also advises that businesses should not be profiting by ‘double recovering’ their money from the government and from customers.

“If it finds evidence that companies are failing to comply with the law, the CMA will take appropriate enforcement action, which could include taking a firm to court if it does not address its concerns.”

Civil Aviation Authority head of consumer protection Matt Buffey said: “We welcome the investigation from the Competition and Markets Authority into cancellation rights and refunds and the statement on its view of how consumer protection law applies.

“We will continue to work alongside the CMA on this issue as it progresses.

“We expect airlines to provide refunds for cancelled flights as soon as practically possible.”

CMA chief executive Andrea Coscelli said: “Our Covid-19 taskforce is shining a light on some of the big issues facing consumers in wake of this pandemic.

“We are now seeing cancellation issues in their thousands. So far, the CMA has identified weddings, holiday accommodation and childcare as particular areas of concern.

“The current situation is throwing up challenges for everyone, including businesses, but that does not mean that consumers should be deprived of their rights at this difficult time. If we find evidence that businesses are failing to comply with consumer protection law then we will take tough enforcement action to protect those rights.”

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