The Competition and Markets Authority (CMA) launched a COVID-19 taskforce in March 2020 to identify any commercial practices that adversely affect consumers and to take enforcement action if a firm breaches consumer protection law and fails to respond to warnings.
The CMA currently has particular concerns about the package travel sector following more than 17,500 complaints from the public about companies that sell package holidays and obtaining refunds. The CMA is alarmed that businesses may not be providing the refunds required by consumer law when package holiday contracts are terminated as a result of COVID-19. The CMA expects that consumers who are entitled to refunds will be paid those refunds, and that businesses will comply with consumer law.
The CMA has written to 100 of the most complained-about UK travel companies to strongly remind these companies that they must act in accordance with consumer law. This mainly relates to the statutory requirement to provide refunds within 14 days for cancelled trips and a reminder not to engage in unfair commercial practices and misleading customers about their statutory rights.
Businesses which do not comply with consumer law risk enforcement action from the CMA or local Trading Standards. Individual consumers who have been affected also have the option of pursuing a claim against businesses in the small claims court.
The CMA says it recognises that the pandemic has created extraordinary pressures on package holiday businesses, but firms must still comply with consumer law and pay out refunds.