Watchdog threatens legal action over missing refunds
By Rob Freeman | 30th April 2020
The competition watchdog has warned companies it will take legal action if refunds are not paid for holidays or weddings cancelled due to the coronavirus pandemic.
The Competition and Markets Authority says it is investigating a rise in customer complaints about cancellation and refunds which make up 80 per cent of calls to its COVID-19 Taskforce.
Many people are feeling pressured to accept vouchers for accommodation - often during more expensive periods - while some wedding venues are refusing refunds and telling people to claim on insurance.
The CMA also said high prices are being asked by some nurseries to keep a place for a child.
While the watchdog said most businesses are acting reasonably, but warned that cannot rights cannot be ignore.
Chief executive Andrea Coscelli said: "Our COVID-19 taskforce is shining a light on some of the big issues facing consumers in the wake of this pandemic.
"We're seeing cancellation issues in their thousands. 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 consumer rights can fall by the wayside."
She continued: "If we find evidence that businesses are failing to comply with consumer protection law then we will get touch - that means launching enforcement cases and moving to court action where there is a strong reason to do so."
Consumer law requires a full refund to be offered if a business cancels a contract without providing any of the promised goods or services, including if the current restrictions mean no service is provided or the consumer has to cancel.
The legal warning was welcomed by consumer rights expert Adam French at Which?.
He said: "We've heard from many distressed people who risk being left out of pocket for significant sums of money as they struggle to get refunds.
"It's right the CMA investigates sectors that are skirting their legal responsibilities on refunds and cancellations by trying to rely on unfair and unenforceable terms and conditions.
"The regulator must be prepared to step in and take strong action against any businesses found to be breaching consumer law and taking advantage of consumers."
Cancelled flights are not covered by the CMA warning as that issue is regulated by the Civil Aviation Authority.
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