COVID-19: CMA to investigate cancellation policy concerns
The CMA has launched a programme of work to investigate reports of businesses failing to respect cancellation rights during the coronavirus (COVID-19) pandemic.
The Competition and Markets Authority (CMA) has established a COVID-19 Taskforce, which monitors market developments and identifies the big problems facing consumers.
The Taskforce has seen increasing numbers of complaints in relation to cancellations and refunds, which now account for 4 out of 5 complaints being received. So far, concerns include people being pressured to accept vouchers for holiday accommodation which can only be used during a more expensive period, wedding venues refusing to refund any money and telling people to claim on their insurance, and nurseries asking people to pay very high sums in order to keep a place open for their child.
Based on the complaints received, the CMA has identified 3 sectors of particular concern:
- Weddings and private events
- Holiday accommodation
- Nurseries and childcare providers
The CMA will tackle these areas as a priority and then move on to examine other sectors, based on the information received by the CMA COVID-19 Taskforce.
The CMA acknowledges that most businesses are trying to do the right thing in these unprecedented circumstances but, at the same time, ordinary consumers deserve to have their rights protected. It also advises that businesses should not be profiting by ‘double recovering’ their money from the Government and from customers.
If it finds evidence that companies are failing to comply with the law, the CMA will take appropriate enforcement action, which could include taking a firm to court if it does not address its concerns.
As well as examining specific sectors, the CMA is today issuing a statement on its views on consumer protection law in relation to cancellations and refunds during the current crisis.
The statement covers a range of consumer contracts and different situations. It includes that, in most cases, the CMA would expect a full refund to be offered if:
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a business has cancelled a contract without providing any of the promised goods or services
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no service is provided by a business, because this is prevented by restrictions that apply during the current lockdown or
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a consumer cancels, or is prevented from receiving any services, because of the restrictions that apply during the current lockdown
Andrea Coscelli, CEO of the CMA, said:
Our COVID-19 taskforce is shining a light on some of the big issues facing consumers in wake of this pandemic. We are now seeing cancellation issues in their thousands. So far, the CMA has identified weddings, holiday accommodation and childcare as particular areas of concern.
The current situation is throwing up challenges for everyone, including businesses, but that does not mean that consumers should be deprived of their rights at this difficult time. If we find evidence that businesses are failing to comply with consumer protection law then we will take tough enforcement action to protect those rights.
If people have been affected by unfair cancellation terms in wake of coronavirus, they can report them to the CMA using the online form.
Whilst the CMA is not able to respond directly to every complaint it receives, the information provided will help the CMA to decide which issues to address as part of this rolling programme of work.
Notes to Editors
- The COVID-19 Taskforce was launched on 20 March to scrutinise market developments, identify harmful sales and pricing practices as they emerge and take enforcement action if there is evidence firms may have breached competition or consumer protection law.
- Protecting consumers during the coronavirus (COVID-19) pandemic: update on the work of the CMA’s Taskforce.
- The key pieces of consumer protection legislation relevant to the CMA’s investigation are the Consumer Rights Act 2015 (CRA) and the Consumer Protection from Unfair Trading Regulations 2008 (CPRs). The CRA prohibits the use of unfair terms in contracts between businesses and consumers. The CPRs prohibit unfair commercial practices by businesses towards consumers.
- For media enquiries, contact the CMA press office by email: press@cma.gov.uk.