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Advice to holidaymakers - cancellations due to Covid-19

View profile for Layla Safieh
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On 17 March 2020, the Foreign and Commonwealth Office (FCO) advised against all non-essential travel, resulting in many cancelled holidays. While some travel providers are cancelling flights and holidays and issuing refunds to consumers, others are issuing credit notes for future travel, or not offering any form of refund at all.  

The impact of coronavirus has left a lot of holidaymakers wondering whether they should apply for refunds or cancel their plans. The travel and service industries have been hit hard by the virus as they are forced to suspend their schedules and let go of staff. But as lockdown measures continue, and more people are left out of work, many will no doubt be seeking refunds.

What can be done in these circumstances?

The Package Travel and Linked Travel Arrangements Regulations 2018 put in place some protections for consumers if they have booked a package holiday. A travel provider is permitted to cancel a holiday due to an ‘unavoidable and extraordinary circumstance’, such as coronavirus. Where a holiday is cancelled in these circumstances, the consumer is entitled to a full refund within 14 days of the cancellation.

However, The European Commission, which is responsible for the relevant regulations, has advised Member states to find “flexible solutions” to demands for refunds on cancelled holidays during the Covid-19 crisis.  In the absence of this Government intervention, and to provide some order to a chaotic situation brought about by the current crisis, ABTA has developed guidance framework for its Members to ensure that if there is a delay in providing a refund, customers don’t lose their rights and protections, and that Members process refunds as soon as they are able to. This is based on a system of financially-protected Refund Credit Notes (RCNs) where the customer’s fundamental rights are preserved, as set out by law (the Package Travel Regulations). Notwithstanding the issuing of Refund Credit Notes, ABTA’s expectation is that Members should refund customers as soon as they are able to.

ABTA, (a UK travel trade association for UK travel providers) has welcomed the European Commission comments, and has now provided guidance to its members, stating that they can offer a credit note, rebook the holiday or provide a refund much later, possibly even four months away. That advice goes beyond the regulations, but ABTA says that its guidance merely sets out a series of options for consumers to discuss with their travel operators

Under EU flight delay rules (which still apply this year despite Brexit, and which cover all flights leaving the UK or EU as well as flights to the UK/EU on a UK/EU airline), you're entitled to choose between:

EITHER a refund for the flight that was cancelled.

OR an alternative flight (airlines call this re-routing) to your destination.

If you are due to travel imminently, but your travel provider has informed you that your holiday will no longer go ahead as a result of the FCO travel ban, then the following steps are recommended:

  1. If your trip has been affected because of the change in FCO advice, talk in the first instance to your travel provider to discuss your options. 

  2. If possible, amend your holiday or travel arrangements to another date. 

  3. If you are not able to amend your holiday to another date, your travel provider might offer you a Refund Credit Note instead of an immediate cash refund. This Refund Credit Note can be used to rearrange a holiday at a later date and, in the meantime, it is protected by ABTA / ATOL if your original booking had that protection, so you would be reimbursed if the travel company failed financially.

  4. If your travel provider has said they will offer a cash refund, please be patient with them as they process this, they are likely to be dealing with an exceptionally high volume of enquiries.


Package Holidaymakers:

Currently, package holidaymakers whose trips are cancelled are entitled to all their money back within two weeks under the Package Travel Regulations.

If you told you are unable to get a refund, then there are a number of options available, depending on how you paid.

  1. Section 75 Consumer Credit Act 1974 claim: 

Where you paid at least £100 towards the flights on a credit card, you may be able to claim against your credit card provider, as they are jointly and severally liable; they are just as liable to provide a refund as the travel provider.  But they will only usually follow this route if you are definitely not able to obtain a refund from the travel provider first, so you should exhaust that possibility first.

To claim under section 75, there must have been a breach of contract, and that will largely depend on the terms and conditions of the contract with the travel provider. So it is not a blanket remedy for all consumers.

  1. Chargeback

This is available to those who have paid for their flights via both debit card and credit card.  It is not a legal mechanism, but one that is within the card provider’s scheme rules. It allows you to request that your card provider reverse a transaction, and put the monies back into your debit or credit account.  Similar to section 75 claims, this only applies when the travel provider has breached the contract, and you can provide evidence of this breach.  This method of receiving your money back is time sensitive, however, and you need to check with your card provider as to how long you have to request a chargeback.

  1. RCN

A Refund Credit Note entitles you to rebook a holiday at a future date or receive a cash refund at the expiry date of the note.  It also retains the financial protection that you had with your original booking.
If your original booking, for example a package holiday with flights, came with ATOL financial protection, the RCN will still provide this protection.  If your original booking came with ABTA financial protection, for example a cruise holiday or other package holiday including rail or coach travel, the RCN will still provide this protection.

Refund Credit Notes may look different depending on your travel provider, but they should all comprise the following:

  • An expiry date, which is the date to which your money is protected, and is based on your travel company’s financial protection arrangements. You are entitled to re-book or have a cash refund by this date at the latest (if your original booking was for a package holiday).

  • The value of the Refund Credit Note must be equal in value to the amount you paid for the original booking (or less the amount your travel provider has offered you as a part cash refund).  

  • The Refund Credit Note must include the original booking details and reference.

  • The Refund Credit Note must not include any other amount offered as a rebooking incentive or other offer. Any such offers must be documented separately and are not covered by any scheme of financial protection.

  • You should retain all previous booking documentation including booking confirmations, ATOL Certificates where appropriate and proofs of payment.

  1. Particular Hardship?

A number of our travel providers have put in place special arrangements for cases of particular hardship. For example, if you have been made redundant during the Covid-19 crisis and your travel insurance policy does not cover you for that risk. If you find yourself in that situation, please ask your travel company how to apply for exceptional assistance and the evidence that would be required to help them to prioritise your case.

  1. Travel Insurance

Another alternative route could be to make a claim on your travel insurance. Most insurers will cover you for cancellation if a Foreign and Commonwealth Office (FCO) advisory is put in place for your destination after you have taken out the policy and it's still in place when you are due to travel – and of course, right now the FCO's warning against non-essential travel to ALL destinations. 

To be sure of what's covered, check your insurer's website – many now list their coronavirus cover. Ordinarily, travel insurance companies will only pay out on costs that have not been refunded. So before you claim on your travel insurance, do all you can to obtain a refund from the travel provider direct. Where a refund is not provided, FCO advice is to make a claim on your travel insurance.

However, major travel insurers have responded to the pandemic by changing policies so they no longer cover coronavirus-related incidents. This means that, for example, some insurance policies may include a clause stating that FCO travel advice or warnings are not grounds for cancellation claims, resulting in you not being able to claim back against your insurance provider for money lost on cancelled holidays during the pandemic. However, if you booked your insurance before the FCO restriction on travel or before changes to the insurance, then it is likely you will be covered.

If your holiday is not protected then you have statutory rights pursuant to the consumer protection act

Legal action remains possible where refunds are being refused, but do try to exhaust the other avenues noted first. Please contact Layla Safieh one of our Dispute Resolution Solicitors should you require assistance, either by email or calling us on 0800 118 1500.  We are happy to review your contract and advise on the options that may be available.  

Please note that information has been obtained from ABTA guidelines and current legal framework which is forever changing.