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HCR Law Events

22 October 2021

Covid-19 pandemic flight cancellations; more customers to be refunded

The many flights cancelled due to the Covid-19 pandemic, often leaving consumers clutching vouchers to be redeemed against a flight to be booked sometime in the future, have drawn the attention of the European Consumer Protection Cooperation Network (CPC).

At the end of September 2021, the EU Commission announced that 16 of the main airlines had engaged with them in pledging to refund consumers in cash (rather than vouchers) for cancelled flights.

The CPC was established by the EU in its Consumer Protection Cooperation Regulation (EC 2006/2004) and further strengthened in 2017; the CPC is a network of national authorities across the EU to ensure enforcement of European consumer protection laws. It was intended to catch scams, rogue traders, hidden or unclear terms and conditions and unfair practices; it has been instrumental in reviewing hidden terms on social media, travel terms, overly complex and unclear car rental terms, online booking or purchase terms and conditions (for example).

The outcome of this most recent review of airline policies for flight cancellations means that the airlines will not only refund cancelled flights in future, but many have also committed to refunding consumers in cash for their previously issued vouchers. The participating airlines have agreed to introduce prompt refund policies for flights cancelled by the airlines, which it is hoped will support the travel and air transport sectors in rebuilding business and consumer confidence.

These commitments from airlines will mean they must give consumers clear and fair information about the options of refund or vouchers available in the event of flight cancellation. It seems very likely that the terms and conditions will distinguish between the options available in the event of an airline cancellation and a flight cancelled by the consumer (where there is no across-the-board obligation to offer a cash refund, depending on the terms and the notice given by the consumer etc.). Vouchers will continue to be available but will only be given where the customer requests them instead of a money refund.

Where booking for flights were made by the consumer through agencies or intermediaries, the consumer may request the refund from the airline directly, although this will not include flights booked as part of package deals.

The CPC has committed to monitoring the airline’s compliance with their pledges. More generally speaking, the CPC has diverse powers to enforce with consumer regulations to try to stamp out unfair practices.

If the offenders are online (increasingly common; scams on websites often hide the entity behind them), the CPC can get the website taken down and has powers to trace the flow of finances to identify the entity behind the website.

The action most commonly taken against businesses infringing consumer protection law is to require them to make changes and accept their pledge to revise their practice (which will be monitored) – ultimately a fine of up to 4% of the business annual turnover can be imposed. The CPC directs its own operations to supervise market activities but also responds to consumer complaints or requests from the EU Commission to investigate.

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About the Author
Georgia Shriane, Senior Associate

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