Travel & COVID: You've been shafted
Are you a jaded Consumer?
Have you fought and won or are you still fighting for your Consumer Rights?
As you battle, do you know what lies ahead for those rights?
These past few months have left a bitter taste in the mouths of many Consumers.
As far back as 2019, many had booked their early spring and summer holidays for 2020, only to have those long-held plans thwarted by the arrival of COVID19.
The sudden rush of this disease, and the arrival of lockdown throughout Europe, delivered a shock and realisation that plans could not go ahead, and businesses began to look down the barrel of the COVID-gun, wondering if they could ride out the storm.
As far back as February, I did say that Consumers should not expect to see their holiday plans going ahead and that summer 2020 would produce a very different experience for many. But, the politico’s and industry were determined to drive ahead with the business of delivering holidays, with some proclaiming that we would all be flying by Easter - how wrong they were!
Then as that realisation began to dawn, the reality of our situations began to produce conflicts that would pit Consumer against their favourite travel companies.
Into the mix was the continuance of the Consumer Rights we had gained, when the UK was a member of the European Union; this would prove to be the saviour of the holidaymaker’s purse, or would it?
Again, as far back as February, I was not only calling on massive support from government to be given to the Travel Industry but I was also calling for the introduction of a Universal Basic Income, to help the Industry over what I believed at the time, would be required for most of 2020. In the last 4 weeks, I have been calling for a Marshall-type plan for the recovery of Travel and in return for taxpayer help, I have suggested that government should provide an interest free, 25-30 loan for the specific purpose of paying back all the refunds owed to Consumers.
For months, I have been concerned by the haphazard way in which Consumers and their rights were being re-interpreted by Travel Companies. We began to see Travel Companies rejecting demands that Package Holiday monies should be repaid, according to Law, within 14 days. Many companies set out to make the Consumer journey as frustrating as possible, some trying to import a re-interpretation of their own Ts&Cs, some trying to import Common Law or Contract Law principles into their responses. It was if the starting gun had been fired and a new phrase came into our vocabulary - the Refund Credit Note.
As I spoke with Consumers, I began to realise the horror of what they were facing: changing contract terms, limitations on use and worst of all, I could see that Consumers were being told, not asked, but told that they would receive their refund in periods ranging from anywhere of between 270 to just over 365 days, from when they made their final payments at the beginning of 2020!
I set out in detail how this would prove to be folly for the Industry - they needed to create a new compact with their customers and think about building confidence, not just for now, but for life after COVID. I set out an action plan, designed to make the Refund Credit Note acceptable to Consumers, whilst ensuring that there was a full acknowledgement to those existing rights.
It was a compromise, designed through the experience of dealing with Consumer problems and I offered to work with the likes of ABTA and Travel Companies to deliver a fair solution, not just for Consumers but also for Travel Companies.
Did I get to work with any of them? Not one single person contacted me from the Travel Industry (except for 3 to visit their angry selves via twitter), but then that’s not difficult to understand, when you can see that they enjoy the revolving door of access government, as was often demonstrated during the early stages of the crisis.
As I saw it, there were two important problems with Refund Credit Notes:
- Whether the Refund Credit Note would attract full financial protection under the ATOL scheme, in the event that the Travel Company went bust - a very real prospect in this crisis, and
- The need to bridge the 14 day requirement in law to receive your refund for a cancelled holiday and the pressures being experienced by travel companies. The key question was this: ‘In this unprecedented crisis, could a temporary exception be made for the delivery of the refund by defining what constitutes a reasonable period?’
That debate started in February 2020.
Government received pleas from Industry and Consumer Campaigners like myself, all to no avail. The only direction received was from the European Union, but that did not answer the key question of what constitutes a “reasonable” period in this crisis.
Then, on 18 July 2020, almost 4 months after the start of the UK-wide lockdown, the UK government, along with the UK’s Civil Aviation Authority, who administer the ATOL scheme, decreed that ATOL Financial Protection would cover the Refund Credit Notes issued.
Whilst that provided some relief from stress for Consumers, the government failed to answer key questions about important Consumer Rights, what constitutes “reasonable” and most important of all, enforcement of Consumer Rights as the UK is required to do, under the Brexit Withdrawal Agreement (you can find that guarantee under Articles 126 & 127, under the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community - dated 13 October 2019).
The government also failed to get a grip of the way Travel Companies operate and how they handle your money; to me it is clear that they have no intention of supporting good travel companies by promoting a ‘fit to trade’ regime through legislation.
Within hours of the ATOL announcement, the BBC and leading newspapers, along with their Travel Journalists, hailed this ATOL ‘benefit’ as a great victory. Within hours the story disappeared; the news was no longer concerned about the loss of rights, the plight of desperate Consumers and the plight of some of those experiencing severe financial hardship as a result of COVID and the actions of Travel Companies.
In my view, the ATOL bonus on Refund Credit Notes does not deliver certainty for Consumers. I say this because Travel Companies will be emboldened to hang onto Consumer monies, using whatever devices they see fit, in the absence of enforcement of rights, for whatever period they deem “reasonable”.
The failure by the UK government is an abdication of responsibility toward its Citizens. It will lead to an even greater hardship, frustration and a continued collapse in Consumer confidence in Travel. That collapse in confidence will regrettably lead to a collapse of Travel Companies, thereby reducing Consumer choice. I also predict that the courts will become clogged with cases brought by Consumers, anxious to get their money back.
If there’s one thing I’ve learned over many years in dealing with Consumers and Travel Companies, it is this: When the Travel monolith’s back is to the wall, they will wake and they will fight tooth and nail to establish principles in law and this won’t be good for Consumers. The Consumer will have to prepare for the battles ahead, a bit like Consumers did before the introduction of the European Package Travel Directive. Consumer Rights will become diminished through a lack of care by government and through the legal battles to come.
For those of you listening to this podcast, I say, do not assume that the rights you enjoy will continue. Events in recent weeks has demonstrated that deregulation is definitely on the agenda and indeed, in the days and months that follow the key deadline, the 31 December 2020, we shall see further moves to cutting so-called ‘red-tape’!
I regret to say, for all sorts of reasons, the British Consumer has yet again been shafted by government and the Travel Industry. Agenda and Apathy is the catalyst for the maxim: every man or women for themselves; it is a dire state of affairs; welcome to this brave new world!
(This is the script for Frank's CreatingRipples™ Podcast - Travel & COVID: You've been shafted. You can listen to Frank's Podcast here)