Holiday lets firm Sykes Cottages has reversed its policy on cancelled bookings and agreed to offer cash refunds to customers whose holidays could not go ahead due to coronavirus, the competition watchdog has said.
The Competition and Markets Authority (CMA) said that, until recently, Sykes had been refusing to provide full cash refunds to all customers whose break had to be cancelled because of Covid-19.
Until the change in policy, Sykes customers were offered rebooking and in some cases vouchers and/or a partial refund. Some consumers may have obtained refunds through other means, however, such as from their credit card or from property owners.
If the company had not changed its policy, the watchdog said it could have launched court proceedings against it.
â Following CMA action, Sykes Cottages has now agreed to offer full refunds to customers on bookings that couldnât go ahead due to the #coronavirus pandemic.— Competition & Markets Authority (@CMAgovUK) July 3, 2020
These commitments apply to 24 businesses and brands owned by Sykes.
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Sykes has now given the CMA a formal undertaking and agreed to:
– Offer a full cash refund to customers whose holidays could not go ahead due to Government restrictions at the time and who have not already rebooked.
– Convert credit vouchers to cash, if customers prefer – as long as the credit voucher has not been used.
– Provide the CMA with monthly reports on how many refund offers have been made and accepted.
The commitments apply to several businesses and brands owned by Sykes, including the Pure Cottages Group and Carbis Bay Holidays, as well as Sykes Cottages itself.
This is the second investigation into Covid-19 cancellation policies of holiday letting companies.
Last month, Vacation Rentals, another major holiday lets group, agreed to offer refunds for all trips which could not go ahead due to the pandemic, following CMA action.
The action is part of a wider probe by the CMA into businesses which reportedly have failed to respect cancellation rights during the pandemic.
Based on complaints received by its Covid-19 Taskforce, the CMA identified holiday accommodation as one of the key areas for investigation.
The taskforce has so far received more than 5,500 reports about holiday rental accommodation providers, with complaints about Sykes making up a significant proportion of those reports, the watchdog said.
The CMA said that, since it issued a statement to help consumers understand their rights and to help businesses treat customers fairly, several firms have voluntarily changed their behaviour.
But others are still not providing refunds to consumers and risk further action from the CMA, which recently expanded the scope of its investigation to include package travel.
The Covid-19 Taskforce was launched on March 20 to scrutinise market developments, identify harmful sales and pricing practices as they emerge, and take enforcement action if there is evidence that firms may have breached competition or consumer protection law.
The CMA has shown it will act to protect consumer rights and enforce consumer law. Businesses must now do the right thing or risk similar enforcement action themselvesAndrea Coscelli, CMA
CMA chief executive Andrea Coscelli said: “Our Covid-19 Taskforce has received thousands of complaints about holiday rental firms, so it’s good to see our action bringing results for consumers.
“Sykes is the second major holiday lets company to change its Covid cancellations policy by offering full refunds following CMA intervention. We expect all companies to do so.
“As lockdown restrictions lift, consumers are still having to recoup their losses from cancelled holidays, which increases the financial worries which many people face.
“The CMA has shown it will act to protect consumer rights and enforce consumer law. Businesses must now do the right thing or risk similar enforcement action themselves.”
Whilst the majority of customers with bookings starting during the current lockdown period have successfully re-arranged their holiday to a later date, we recognise that not all those have been able to or wanted to. Throughout June, more than 5,000 customers have received a full refundGraham Donoghue, Sykes Holiday Cottages
Graham Donoghue, chief executive of Sykes Holiday Cottages, said: “The last few months have been some of the most stressful for UK holidaymakers and most challenging for the sector’s agents and operators.
“Whilst the majority of customers with bookings starting during the current lockdown period have successfully re-arranged their holiday to a later date, we recognise that not all those have been able to or wanted to. Throughout June, more than 5,000 customers have received a full refund.
“Like many parts of the leisure industry, we have worked with the CMA, but the wheels were in motion on this before they got in touch.”
The CMA said that, between March 10 and June 28, it was contacted more than 80,000 times generally about coronavirus-related issues.
Around 3,500 contacts were made per week in June – although this was about half the level the CMA saw in May, when nearly 7,000 contacts were made per week.
The watchdog said consumers generally continue to raise concerns about firms refusing to provide refunds, introducing unnecessary complexity into the refunds process, charging high administration or cancellation fees, and pressuring consumers into accepting vouchers instead of cash.
Around three-quarters of cancellation complaints received relate to holidays and air travel.