Millions of people have been left out of pocket by firms who are breaking the law on refunds during the coronavirus crisis.
Customers have lost thousands of pounds on holidays, weddings, festivals and even childcare – with firms handing out vouchers, despite customers being legally entitled to a full refund.
“But the law states you are allowed your money back,” Martin Lewis explained on tonight’s ITV Money Show.
“We got an announcement from the Competition and Markets Authority (CMA) today, explaining that all sectors should refund you if no goods or services have been provided due to coronavirus.
“This includes if a firm cannot provide a service due to lockdown or if a customer can’t access a service due to lockdown.”
The CMA, which made the announcement on Thursday, said there are three main areas where firms may be breaking the law: on weddings and private events, holiday accommodation and childcare (including childcare providers).
However, it does not cover flights – which comes under the Civil Aviation Authority (we’ve got a full guide on how to get your money back on flights, here).
“Many firms are offering vouchers instead of cash refunds, is this allowed?” Martin said in a live Q&A to consumer expert George Lusty at the CMA.
“Well, if someone wants to take a voucher that is fine as long as the terms are clear – but it can’t be to the exclusion of a cash refund.
“If you want your money back you should be able to get it,” Lusty added.
“Right now, millions of people face uncertainty in their jobs and they need their cash more than ever,” Martin said.
“With firms like Ryanair saying it could be a year, and other companies making it difficult for cash refunds, will you be taking enforcement action against them?”
Lusty said the CMA will not hesitate to take action against companies who are refusing people their consumer rights.
“We’d be concerned if people are losing out on their consumer rights and not getting their money back. If nothing is being provided, then we don’t think it’s fair to charge people eye-watering fees.
“We’re trying to get people’s money back and will take businesses to court if we need to. We’re currently writing to firms who could be breaking the law and will take them to court if they continue to do so.”
But what happens if your actual contract says it’s ‘non-refundable’?
“If a particular term of a contract is unfair, it may not stand up in court – especially if the company cannot deliver the service right now. So if the firm says the service is non-refundable, despite not being able to provide it, you still have a case.
“We can’t pursue every case that comes our way but we are prepared to act and we want businesses to do the right thing,” Lusty said.
If you come across a retailer who is breaking the law, report it to gov.uk/cma who will then investigate.
Am I owed a refund?
The law states a refund should be issued where:
- a business has cancelled a contract without providing any of the promised goods or services
- no service is provided by a business, because this is prevented by restrictions that apply during the current lockdown
- a consumer cancels or is prevented from receiving the service, due to the restrictions that apply during the current lockdown.
What happens if the firm still refuses to refund me?
In the UK, there are two money-back schemes that could help you get a refund through your bank, building society or credit card issuer.
The first of these protections is chargeback, which covers all card payments through banks and building societies. While not a direct consumer right, it is a process that allows you to reverse a transaction if you’re unable to resolve a dispute with a business.
To start a claim, call your bank card provider and ask to dispute the transaction.
It can then start the procedure of claiming the money back from the supplier’s bank. Some claims can be made after 120 days, but the longest cut-off period is 540 days from the date of the initial transaction.
The second is Section 75 of the Consumer Credit Act 1974. This is a legal protection for credit card users on purchases of more than £100 and less than £30,000. It means your card issuer is jointly responsible if a sale goes wrong.
To use Section 75, ask your lender for a claim form and start the process online.
British Airways warning
This week British Airways also announced a huge change to its cancellations policy for anyone with upcoming bookings.
“BA has launched a new cancellations policy,” Martin explained.
“However, it might not work for everyone.”
The company says if you have a holiday booked between now and July 31, you can now chose to cancel it for a voucher to the equivalent amount.
Previous to this, the airline (and all other firms) maintained that you would lose your booking if you cancelled it due to the outbreak.
“Remember, if an airline cancels your flight, you can get a full cash refund.
“If you cancel it, you’ll get a voucher, so it may be worth holding out to see what happens.”
Travel insurance warning
“Travel insurers made a huge change to their policies this week – and it’s good news if you have annual cover,” Martin added.
“Axa, Churchill and Direct Line are saying if you haven’t used your annual travel insurance, you could get a pro-rata refund on what you haven’t used.”
To get your money back, contact your travel insurer directly.