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Law360, London (December 16, 2020, 1:51 PM GMT ) The competition watchdog said Wednesday it is launching an investigation into whether airlines failed to give passengers refunds for flights they could not take lawfully because of government travel restrictions imposed to fight the COVID-19 outbreak.
The Competition and Markets Authority said it will investigate airlines that offered customers only vouchers, or offered to rebook trips, for flights that were not technically canceled amid the COVID-19 lockdowns but which customers would have had to break the law to board.
The regulator said airlines could have breached travelers' rights by not offering cash refunds.
"We will be carefully analyzing all the evidence to see whether any airlines breached consumers' legal rights by refusing people cash refunds for flights they could not lawfully take," Andrea Coscelli, chief executive of the CMA, said. "We recognize the continued pressure that businesses are currently facing, but they have a responsibility to treat consumers fairly and abide by their legal obligations."
The CMA said it will seek information from a number of airlines as it seeks to understand how they approach making refunds for consumers prevented from flying by lockdown. The antitrust watchdog, which will work with the Civil Aviation Authority on the probe, will decide whether to take enforcement action against airlines at the end of the investigation.
The CMA said in April it was prepared to take companies to court if they refuse to give customers refunds after events and holidays are canceled because of the coronavirus outbreak.
The watchdog said at the time it had seen a record rise in the number of complaints it received, highlighting that many businesses, particularly holiday companies, were pressing customers to accept vouchers instead of cash refunds.
The complaints were in three main areas, the CMA said: wedding venues, holiday accommodation and children's nurseries. The regulator said "customer rights cannot be ignored," even during a pandemic.
The antitrust watchdog has already intervened in some cases. Virgin Holidays promised in October to refund £203 million ($27 million) to customers whose holidays were canceled amid the pandemic after the CMA threatened to take it to court. The company had been inundated with requests for refunds, the CMA said. Virgin told customers that they were entitled to a refund — but the money never turned up, the complaints said.
The watchdog said it has also taken action against 100 other package holiday companies to remind them of their obligation to comply with consumer protection law when they deal with cancellations caused by COVID-19. It has already secured commitments from travel group TUI UK and other companies, the watchdog said in October.
Consumer law requires that a business should offer a full refund it it cancels a contract without providing any of the promised goods or services.
--Additional reporting by Joanne Faulkner. Editing by Ed Harris.
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