The honeymoon’s over: CMA targets wedding firms and holiday providers over COVID cancellation and refund practices

The UK Competition and Markets Authority (CMA) has stepped up its enforcement action against wedding firms and holiday providers whose cancellation and refund practices are deemed to fall short of required standards. 

As we reported last year, the CMA has kept a particularly watchful eye on businesses in these sectors since the onset of the COVID-19 crisis. But recent months have seen a marked increase in concrete action taken against individual firms, a number of whom have been required to give legally binding commitments to repay customers and revise cancellation policies as a result.

The CMA announced last Thursday that it is launching an investigation under consumer protection law into Teletext Holidays, after receiving hundreds of complaints that customers were not being handed refunds for package holidays cancelled due to Covid-19. This marks just the latest in a flurry of recent investigations into the sector.

But it’s not just holiday providers in the spotlight. The end of last year also saw the CMA issue stern warnings to wedding operators over concerns that couples were still not receiving fair refunds for ceremonies that could not go ahead during the pandemic. Certain firms are reported to have misled customers about the level of refund they were entitled to, or otherwise only allowed customers to re-book events at a higher price than originally quoted – both potential breaches of consumer protection laws. 

One business, Bijou Weddings Group, was singled out for investigation by the CMA and required to commit to changing its policies. But the CMA also sought fit to release fresh guidance to all wedding firms operating across the UK, highlighting that:

• firms should not make deductions from any refund unless they can prove that the relevant costs were incurred directly for the wedding in question, and have provided a breakdown of those costs to the customer;
• refunds should be paid promptly and without unreasonable delay; and
• couples should not face additional charges when they voluntarily agree to reschedule their wedding to a comparable date and service instead of seeking a refund.

Whilst package holidays and weddings have been on the CMA’s COVID radar for some time, fresh attention is now also turning towards the airlines sector. 

Just before Christmas the CMA launched an investigation into airline operators, citing concerns that some may have breached consumers’ legal rights by failing to offer cash refunds for flights they could not legally take. 

The CMA noted its intention to work closely with the Civil Aviation Authority to identify and tackle possible breaches of consumer protection law, and as a first step has written to a number of airlines to gather information about their respective refund policies during lockdown. The results of these enquiries are yet to be released, but the CMA has made clear it is ready to launch enforcement action against individual airlines if the evidence is sufficiently compelling.