ABTA Insists Suppliers Not to Delay Refunds to ‘Maximise Liquidity’
ABTA has urged supplier members to ensure their refunds for holidays cancelled because of COVID-19 are paid as promptly as possible, and only delayed when it is “absolutely necessary” for their survival.
The association shared a copy of an open letter from the Competition and Markets Authority (CMA) warning firms of potential enforcement action, which includes how package-holiday companies should respond to refunds and cancellations during the COVID-19 crisis.
In its email, Abta said members should offer a refund where required by law, including on rebookings, as soon as possible.
It said: “Members should not delay refunds any more than is absolutely necessary for their own survival – in particular, refunds must not be delayed until close to the end date of a Refund Credit Note simply to maximise liquidity.”
The CMA’s “advisory” letter acknowledged the “extraordinary pressures on package holiday businesses”, but stated: “Although we were sympathetic to the challenges faced in the early days of the pandemic, it is nonetheless important businesses comply with consumer law.”
“While the CMA is not beginning enforcement action against your company at present, we continue to monitor the complaints and intelligence we are receiving”. It added.
But John Bennett, managing director, Colchester Travel Group, who owns operator Nordic Experience and agency Colchester Travel, felt sending a generic letter out “willy-nilly” was the wrong approach.
“It’s too easy to blast out an email without first sanitising the complaints to see which are justified,” he said. “The letter includes implied threats. People don’t know what it’s like at the coalface.”
A senior industry source said: “The volume of complaints, 17,000, looks big. But when you consider the number of bookings affected, it is a minority of consumers. There were perhaps four million cancellations. There are 2,000 ATOL holders.
“The CMA writing to 100 companies is not a surprise. A very few numbers of ABTA members did not get it right, and they have come into line.”