The Competition and Markets Authority (CMA) has launched a new campaign to help holiday and travel businesses improve the clarity of their terms and conditions.
The “Small Print, Big Difference” campaign is being run in partnership with the lead associations representing the holiday and travel industry, including ABTA – The Travel Association, UKHospitality and the Specialist Travel Association (AITO), among others.
As holidaymakers get ready to make the most of the Easter break, the CMA’s campaign calls on holiday and travel businesses to “check in” and make sure they are using fair terms and conditions in their customer contracts. It also encourages businesses to be upfront and clear with their customers about charges and fees, especially in the event of a customer cancellation.
Holidays can be an expensive outgoing with people in the UK spending an estimated £81 billion on them at home and abroad in the 12 months to April 2018. However, some holidaymakers may have to cancel their plans due to changes in circumstances such as an illness or death in the family.
Under consumer law, businesses may be entitled to ask customers to pay a cancellation fee to cover their losses, but the amount they keep must be in proportion to what they are losing. Cancellation terms that don’t follow this approach are likely to be unfair and businesses can’t rely on them to resolve claims or disputes with customers.
A national survey of 2,000 people by Ipsos Mori, released by the CMA today, shows what members of the public feel should happen if they have to cancel a trip:
- 89 per cent felt they should get all, or most, of their money back if they cancel and the business re-sells their booking
- 85 per cent felt that it’s unfair if they have to pay part of the cost of a booking when they cancel
- 66 per cent felt that travel and holiday businesses do not always make it as easy to cancel a booking as they should
- Of those with experience of cancelling a booking, one in five felt that they had been treated unfairly
A term can be legally unfair if it gives the business an unfair advantage. Examples of unfair terms can include those which allow a business to take a large, upfront deposit and refuse to refund any of the customer’s money if they cancel, regardless of the amount the business is losing or the reason for the customer cancelling.
Another example is when a business insists on a large cancellation fee that bears no relation to the actual losses it experiences from the cancellation. A term is more likely to be fair if it clearly explains how a charge reflects what a business will genuinely lose from a cancellation, and if the way this charge is calculated is reasonable.
Paul Latham, the CMA’s director of strategy and communications, said: “Nobody wants to cancel a trip or holiday, but if you have to, it’s important that you are treated fairly and don’t lose out more than is absolutely necessary.
“Fair terms are a legal requirement as well as helping reassure customers that they’re dealing with a company they can trust.
“Unfair terms can’t be enforced so they also won’t protect businesses if challenged. The small print really can make a big difference.”
Mark Tanzer, chief executive of ABTA, said: “At ABTA, we recognise the importance of customers feeling confident that they are buying from a business that commits to treating them fairly. ABTA has discussed its model terms and conditions with the CMA, and along with the ABTA Code of Conduct, I am confident they provide our members with a strong framework to ensure they are compliant with the regulations and are fair for customers.
“There are circumstances when a cancellation charge may apply, but it must genuinely reflect the costs of cancellations faced by the travel company. We always encourage people to take out travel insurance as soon as they book their holiday, which should protect them from the costs for most cancellations.”