Coronavirus: 60,000 complaints over refunds and price hikes

Tom BelgerFinance and policy reporter
Yahoo Finance UK
A sign as complaints over company refund policies and price hikes have soared. (David Becker/Getty Images)
A sign as complaints over company refund policies and price hikes have soared. (David Becker/Getty Images)

A UK government watchdog has received more than 60,000 complaints over companies linked to the coronavirus, with widespread anger over refund policies and price hikes.

The Competition and Markets Authority (CMA) has already warned firms not to breach competition and consumer protection law. But many customers have faced problems securing timely refunds for services, events and trips as companies struggle to cope with unprecedented levels of cancellations and collapsing revenue.

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The CMA said on Thursday it had been contacted more than 60,000 times about coronavirus-related issues between 10 March and 17 May. Three-quarters of complaints involved holidays and air travel, with the CMA anticipating issues will continue to grow as the summer holidays approach.

The watchdog was keen to emphasise that most UK firms had behaved properly, however. The 16,000 firms complained about are “a very small minority of the more than 5.9 million private sector businesses in the UK,” it said in a statement.

“But we are concerned that a small minority may be exploiting the situation, for example by ignoring customers’ cancellation rights, charging excessive prices, or making misleading claims about goods or services,” the watchdog said.

It comes after a survey by consumer group Which? showed trust in the travel industry had sunk to its lowest level in at least seven years over refund problems with airlines and holiday firms.

The CMA said it had passed a fifth of all cancellation complaints over travel booked directly through airlines to the Civil Aviation Authority (CAA), which regulates the sector.

But the CAA’s chief executive Richard Moriarty told MPs recently that current rules mean it can take two years for it to take action against carriers.

Under EU rules, payouts should be made within seven days. The CAA has launched an investigation and is looking at further action, however.

The CMA also said many complaints involved price hikes seen as unfair. It has written to 264 firms, who received more than 3,000 complaints, and has received responses from some.

“The majority of these attribute high prices to higher costs charged by suppliers, although this does not adequately explain prices that are far in excess of the average,” said the CMA.

“The CMA will use its powers to their fullest extent; but it has also advised government on legislative changes that would enable a faster and more robust response to unjustifiable price rises,” it added.

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