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CMA Threatens to Take Companies to Court Over Refunds

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The Competition and Markets Authority (CMA) has threatened to take legal action against firms that fail to provide refunds for holidays and weddings that have been cancelled due to the COVID-19 pandemic.

The CMA says that around 80% of the complaints received by its COVID-19 Taskforce are regarding refunds for cancellations.

Some wedding venues are outright refusing to refund money for cancelled weddings, and some holidaymakers have been put under pressure to accept vouchers instead of refunds for accommodation.

The consumer watchdog says that wedding venues are telling clients to claim the money back on their insurance, whereas the holiday vouchers being offered can only be redeemed during a more expensive time to travel.

Additionally, some nurseries in the UK are asking parents to pay lofty fees in order to keep their child's place reserved at their nursery.

Chief executive of the National Day Nurseries Association, Purnima Tanuku, said: "Nurseries are being put between a rock and a hard place during this crisis. They are being asked to remain open and run at a loss to provide emergency childcare, while those who can't open still face staffing and other costs which the government's support doesn't fully cover.”

According to consumer law, a full refund must be offered if a business cancels a contract without providing the promised services or goods.

This also includes the non-fulfilment of services due to lockdown restrictions, or if a client themselves has to cancel due to the lockdown restrictions.

The CMA’s warning to businesses covers private events and UK holiday accommodation, but does not extend to refunds for flights that have been cancelled due to the lockdown. The Civil Aviation Authority handles the issue of cancelled flights.

Consumer rights expert at Which?, Adam French, praised the move by the CMA.

"We've heard from many distressed people who risk being left out of pocket for significant sums of money as they struggle to get refunds for cancelled weddings, private events, or holiday accommodation," French said.

"It's right the CMA investigates sectors that are skirting their legal responsibilities on refunds and cancellations by trying to rely on unfair and unenforceable terms and conditions.

"The regulator must be prepared to step in and take strong action against any businesses found to be breaching consumer law and taking advantage of consumers during these unprecedented times”.

Harry Pererra
Harry Pererra

Harry turns on his experience in journalism and programming to write about the latest news in the world of tech and the environemtn. When he isn’t writing for usave he is working towards his Blue Belt in Brazilian Jiu Jitsu, and prefers dogs to cats.

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