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Coronavirus: More than £1bn in refunds 'illegally withheld' for cancelled holidays

·3-min read
Aircraft operated by TUI, Virgin Atlantic, Easyjet and Jet2, are pictured at Manchester Airport in Manchester, north west England on July 27, 2020, following the holiday operator TUI's decision to cancel all holidays to mainland Spain, due to a spike in the number of COVID-19 cases there. - Tour operator TUI has cancelled all British holidays to mainland Spain from Monday until August 9, after the UK government's decision to require travellers returning from the country to quarantine. The newly-imposed rule to self-isolate, abruptly introduced at midnight Saturday hours after being announced, follows a surge in novel coronavirus cases in parts of Spain in recent weeks. (Photo by Anthony Devlin / AFP) (Photo by ANTHONY DEVLIN/AFP via Getty Images)
The cancelled holiday money is illegally being withheld in partial or full refunds from customers who asked for their money back, with the survey suggesting the average cancelled holiday cost £1,784. Photo: ANTHONY DEVLIN/AFP via Getty Images

An estimated £1bn ($1.3bn) in holiday refunds from cancelled travel due to the COVID-19 pandemic are still yet to be paid to consumers.

According to new research from consumer watchdog Which?, that is out of an estimated £8bn worth of package holidays that were cancelled since the pandemic swept the globe.

Which? surveyed more than 7,500 people who have had a package holiday cancelled as a result of the pandemic to understand how the situation around refunds has developed since the UK first entered lockdown.

Money is being illegally withheld in partial or full refunds from customers who asked for their money back, with the research suggesting the average cancelled holiday cost £1,784.

Millions of people have had a package holiday cancelled by their provider since the UK went into lockdown in March. Refunds for one in five (21%) holidays where a cash refund was requested was still outstanding at the beginning of October.

According to Which?, under the Package Travel Regulations 2018, if a package holiday is cancelled by the provider, the customer is legally entitled to a full refund within 14 days.

A package holiday is a booking comprising at least two types of travel or travel-related services made through the same source, most commonly flights and accommodation.

Rory Boland, editor of Which? Travel, said: “It’s simply unacceptable that some of the UK’s largest operators are still getting away with breaking the law, but without meaningful intervention from the government and the regulators in this space, many people will struggle to get their money back.”

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Which? estimates that 9.4 million people have had a package holiday cancelled since the pandemic hit the UK.

The backlog of refunds for cancellations caused by the coronavirus pandemic meant that the majority of operators struggled to refund within the legal time limit, with customer service lines overwhelmed by travellers trying to contact them to ask about their refunds.

Some package providers reported delays in receiving refunds back from airlines, many of which – despite making commitments to the aviation regulator – continue to break the law on refunds. This has meant package holiday operators have often only been able to process partial refunds for customers.

But while some companies have managed to get on top of the backlog caused by these delays, several other major providers have continued to leave passengers out of pocket, with Which? still receiving huge numbers of complaints from customers waiting for refunds.

Which? said the average amount of time spent contacting package holiday companies about cancelled trips was around 15.5 hours. For more than four in 10 (43%) of the cancelled holidays reported to Which?, customers said they waited longer than a month to get their money back.

The research comes as Ryanair this week said that customers with flights booked in November will not be eligible for a refund, despite the fact that many will have to stay at home under new lockdown restrictions.

Outbound international travel will be banned as of Thursday, except for work purposes. Travel within the UK is also discouraged.

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