Travellers struggling to get money back from credit card providers

Customers who have turned to their banks and credit card providers to obtain refunds for holidays cancelled in the coronavirus outbreak have complained that they have been unable to do so.

File photo dated 04/10/17 of a Ryanair plane. The budget airline has cancelled 190 flights scheduled for Friday because of strikes by cabin crew in Spain, Belgium, the Netherlands, Portugal, Italy and Germany. PRESS ASSOCIATION Photo. Issue date: Tuesday September 25, 2018. See PA story EUROPE Ryanair. Photo credit should read: Niall Carson/PA Wire

Millions of people had flights and holidays booked before the virus took hold and have struggled to get the money back from airlines and tour operators, many of whom have offered vouchers instead of a refund. However, customers are concerned that firms could collapse before they can use their voucher - and do not know when they will next be able to travel.

It is believed that around £7 billion has been lost in cancelled flights.

However, now those who have tried to claim a refund from their credit card company through Section 75 of the Consumer Credit Act - which covers a breach of contract - say they have been blocked by financial institutions.

Some customers have been told they are not eligible for refunds because their airlines or tour operators have been offered credit notes, contrary to the guidance issued by Visa and Mastercard, which says a customer can ask their bank to initiate a chargeback dispute if a company does not provide the service that has been paid for. If a customer has used a debit card for the purchase, they can potentially also ask the bank to refund the money using chargeback rules.

Gareth Shaw, head of money at Which?, said: “While it is a very difficult time for businesses, the coronavirus outbreak has also put people’s finances under considerable pressure, and they deserve to get their money back if they want a refund for a cancelled event or trip, rather than a voucher or the option to rebook.“However, there is clearly confusion about the circumstances which allow banks to help their customers achieve this. There needs to be greater clarity and consistency about claiming through banks, and the industry should ensure that all bank customers have a fair chance of getting their money back.”Problems relating to travel refunds account for around four in five complaints made to the Competition and Markets Authority at the moment.

UK Finance, which represents the banking and credit card industry, said: “Generally speaking, if the supplier of goods or services has not delivered what has been paid for through a credit or debit card, then customers should be able to get their money back.

“However, it is important to note there is not an automatic legal right to receive your money back through chargeback rights or Section 75 as this will depend upon all the relevant facts in each case.”

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