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Law360, London (April 28, 2020, 1:00 PM BST ) British banks are taking an "inconsistent and confusing" approach to managing claims from customers struggling to get refunds from travel and events companies for cancellations resulting from the coronavirus crisis, a consumer rights group said Tuesday.
Consumer group Which? has urged retail banks to clear up confusion over their refund policies as holidays and public events such as festivals and sports meetings are being canceled because of the global pandemic.
Lenders are failing to provide basic information to consumers about the protection they are entitled to under British law to claim money back, the pressure group said.
"There is clearly confusion about the circumstances which allow banks to help their customers achieve this," Gareth Shaw, head of money at Which?, said. "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."
Bank customers can attempt to claw back money for canceled events using so-called chargeback applications to their debit and credit card providers. This tool reverses transactions if a consumer cannot resolve a dispute with the company they have paid.
Consumers can also rely on legal powers under the 1974 Consumer Credit Act, which protects customers for payments made on a credit card between £100 (£123) and £30,000 if the retailer does not deliver the goods promised.
Which? said that it had a tenfold increase in inquiries about the two methods. There were 10,000 queries in March and April so far, compared with just 1,000 in January and February.
Banks are taking differing approaches to chargeback applications and refunds under the Consumer Credit Act, the consumer group said. Some lenders are blocking consumers from using the chargeback route if they have been offered a voucher or the option to rebook from a travel agent or events business.
"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 canceled event or trip rather than a voucher or the option to rebook," Shaw said.
The group urged banks to be more transparent about the types of refund claims that are likely to be successful during the crisis.
Banking trade group UK Finance has been contacted for comment.
The Association of British Insurers has said that insurers have been making record payouts for travel claims over canceled holiday and travel plans.
--Editing by Ed Harris.
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