Banks freeze “$ 7 billion in vacation reimbursements”, leaving thousands of vacationers out of pocket due to Covid cancellations

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Banks have so far blocked billions of pounds of refunds from vacationers trying to get their money back from trips canceled by the coronavirus epidemic.

Customers are entitled to a full refund of the trip within 14 days if their vacation is canceled by the tour operator or the airline if the flights do not continue.

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Credit and debit card customers are advised that they are not entitled to reimbursement from their supplier for canceled vacations 1
Credit and debit card customers are advised that they are not entitled to reimbursement from their supplier for canceled vacations Credit: EPA

It is estimated that Britons collectively owe around £ 7 billion to travel agencies, four out of five complaints to the Competitions and Markets Authority (CMA) regarding travel reimbursements.

Which survey? found that the top 20 travel companies, including TUI, Ryanair and British Airways, flout the law by granting refunds outside the two-week deadline.

In addition, tour operators have been criticized for distributing travel notes or a change in reservation instead.

But many customers don’t want to accept them for fear that they won’t be able to use them or lose their value if the business goes bankrupt.

How to make a claim under section 75

For purchases between £ 100 and £ 30,000 made by credit card, your card provider is jointly liable if you do not get the service you paid for.

In this scenario, you could request a full refund from your credit card provider for canceled flights.

If your flights have not yet been canceled, you will probably have to wait until they are canceled before you can claim, because from the perspective of your card provider, this service is still in progress.

If you think you have a complaint, contact your card provider directly – Which one? has a free tool that can help you do that.

You must make a claim within six years of purchasing the goods or services

Keep in mind that you will have to claim different transactions separately, for example if you paid for your flights and hotels separately.

A gray area to watch for is goods paid for through an agent, such as a travel agent or a third party, as your card provider may claim that it has no “direct relationship” with the provider.

If your complaint fails, you can file it with the free financial mediation service.

If they are refused a refund, buyers who paid with a credit card can claim money from their supplier under section 75 of the Consumer Rights Act.

These rights of claim intervene in the event of breach of the contract between the buyer and the seller, for example if the goods or services which have been paid for have never been delivered.

But now which one? warns that some credit card providers have been informed by their provider that they are not eligible for a refund through the program.

Others have been informed that their request will not be processed until they have tried to recover the money from the travel agency, although this is not a legal requirement.

According to the latest research from Which?, Some banks also prevent credit or debit card holders from requesting a refund for purchases under £ 100 through the “chargeback” system.

This is not a legally binding service, but one that is issued by your card provider.

If successful, the provider will contact the card company to recover the money from the travel agency bank, which means that the bank itself does not have to disburse the funds.

But Halifax, Metro Bank, and RBS customers have been advised that they cannot make a claim because they have been offered credit scores, even if these “rules” are not set out in the instructions from Mastercard or Visa.

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The consumer group says the number of people using its free charge-back tools and item 75 has increased to 100,000 since March, up from 1,000 in January and February this year.

“While this is a very difficult time for businesses, the coronavirus epidemic has also put people’s finances under considerable pressure, and they deserve to get their money back if they want a refund for a canceled event or trip , rather than a voucher or the option to change reservations, “said the stock market director at Which? Gareth Shaw.

“There needs to be more clarity and consistency in complaints through the banks, and the industry should ensure that all bank customers have a fair chance at getting their money back.” “

A spokesperson for UK Finance, the trade body representing the banks, told The Times: “Generally speaking, if the supplier of goods or services has not delivered what has been paid for by credit card or customers should be able to get their money back.

“However, it is important to note that there is no automatic legal right to receive your money through chargebacks or section 75 as this will depend on all the relevant facts in each case. “

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