Through its Covid-19 Taskforce, which monitors market
developments and identifies the big problems facing consumers,
the Competition and Markets Authority (CMA) has seen increasing
numbers of complaints in relation to cancellations and refunds.
These now account for 4 out of 5 complaints being received into
the Taskforce and so far include concerns about businesses
refusing refunds or firms pressuring people to accept vouchers
for holiday accommodation, which can only be used during a more
expensive period.
Based on the complaints received, the CMA has identified 3
sectors of particular concern:
- weddings and private events
- holiday accommodation
- nurseries and childcare providers
It will tackle these areas as a priority and then move on to
examine other sectors, based on the information received by the
taskforce.
The CMA acknowledges that most businesses are acting reasonably
in what are unprecedented circumstances, and the current crisis
is placing everyone under pressure, but consumer rights cannot be
ignored.
If it finds evidence that companies are failing to comply with
the law, the CMA will take appropriate enforcement action,
including moving quickly to court if a firm does not address its
concerns. Individuals can also take their own legal action
against unfair terms should they choose to.
As well as examining specific sectors, the CMA is issuing a
statement on its views on consumer protection law in
relation to cancellations and refunds during the current crisis.
For most consumer contracts, the CMA would expect a full refund
to be issued where:
-
a business has cancelled a contract without providing any of
the promised goods or services
-
no service is provided by a business, for example because
this is prevented by the restrictions that apply during the
current lockdown
-
a consumer cancels or is prevented from receiving the
service, for example due to the restrictions that apply
during the current lockdown
It also advises that businesses should not be profiting by
‘double recovering’ their money from the Government and
customers.
Andrea Coscelli, CEO of the CMA, said:
Our Covid-19 taskforce is shining a light on some of the big
issues facing consumers in wake of this pandemic. Alongside
price-gouging reports, we’re now seeing cancellation issues in
their thousands. So far, 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 that consumer
rights can fall by the wayside. If we find evidence that
businesses are failing to comply with consumer protection law
then we will get tough – that means launching enforcement cases
and moving to court action where there is a strong reason to do
so.
If people have been affected by unfair cancellation terms in wake
of Covid-19, they can report them to the CMA using
the online form.
Whilst the CMA is not able to respond directly to every complaint
it receives, the information provided will help the CMA to decide
which issues to address as part of this rolling programme of
work.
Notes to Editor
- The Covid-19
Taskforce was launched on 20 March to scrutinise
market developments, identify harmful sales and pricing
practices as they emerge and take enforcement action if there
is evidence firms may have breached competition or consumer
protection law.
- Protecting consumers during the coronavirus (COVID-19)
pandemic: update on the work of
the CMA’s Taskforce.
