The Competition and Markets Authority (CMA) is currently investigating two major airlines over concerns that they may have broken consumer law by not offering refunds to customers who were legally not permitted to travel as a result of Covid-19 lockdowns.

It has been suggested that the two airlines in question may have offered those affected by the changes in government advice alternative options to a refund, such as a voucher, but refused to reimburse customers with a full cash refund.

While airlines are allowed to offer customers vouchers or the chance to change their flights to a later date, under EU Law, airlines have a responsibility to provide full refunds if the flight has been cancelled and is no longer going ahead.

Both airlines in question have disputed the allegations, insisting that customers had been refunded in justified cases.

Failing to provide refunds where legally obligated left customers in a tricky situation when trying to recover their costs. Customers could likely have felt pressured into accepting vouchers over fears that should they reject the offering; they could lose all of their money.

What makes the situation worse is, if a customer has been encouraged to accept an alternative form of reimbursement, such as a voucher, they wouldn’t also be able to claim the cash equivalent back.

The reason for this is because if a customer can move their holiday, or receive a credit note or voucher to rebook their trip, they have not been left out of pocket and will be able to go on the trip at a later date.

The only way travel insurers would look to review a claim for a cancelled trip is if the customer is able to provide the insurer with written confirmation that they are unable to recover their lost costs from their airline, that they have not accepted a voucher any other form of reimbursement, and that they are unable to recover any money through any other mediums such as credit card company or bank.

The reason insurers will often ask for this type of confirmation is because travel insurance policies are designed to put customers back in the same financial position as they were before a loss. Therefore, if a customer can get a refund, move their holiday, or receive a credit note to rebook their trip, there is simply nothing to claim back.

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