The UK’s competition watchdog has reported four out of five complaints being received into its COVID-19 Taskforce relate to cancellations and refunds across industries including ticketing.
The Competition and Markets Authority (CMA) launched the Taskforce on March 20 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.
In its most recent report, the authority said it is particularly concerned about firms refusing refunds, as well as introducing “unnecessary complexity” into the process of obtaining refunds, charging high administration or cancellation fees, and pressuring consumers into accepting vouchers instead of cash refunds.
The Taskforce said it is “looking closely at these practices – with a focus on sectors and individual businesses that have been the subject of a high volume of complaints – and next steps will be announced next week.”
The CMA received almost 21,000 complaints about coronavirus-related issues between March 10 and April 19, with a total of 6,000 businesses mentioned.
The watchdog said: “The vast majority of businesses are behaving responsibly and fairly in the unprecedented circumstances created by the coronavirus outbreak.
“But we are concerned that a small minority may be exploiting the situation, for example by making misleading claims about goods or services, charging excessive prices, or ignoring customers’ cancellation or other rights.”
The UK has seen a live events blackout since mid-March, with many major events forced to cancel due to COVID-19 lockdown measures. Vouchers, ticket rollovers and refunds have been offered to ticketholders as thousands of festivals, concerts, sports and theatre events are cancelled or postponed.
The CMA said it would expect a full refund to be issued where a business has cancelled a contract without providing any of the promised goods or services, as well as where no service is provided by a business, and where a consumer cancels or is prevented from receiving the service.
It also said non-refundable deposit or advance payment should be refunded and said it considers that businesses should not charge an admin fee (or equivalent) for processing refunds during COVID-19.
In terms of vouchers, the CMA said they can be offered as an alternative to a refund, but consumers “should not be misled or pressured into doing so,” and a refund should still be an option.
Andrea Coscelli, chief executive 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. Alongside price-gouging reports, we’re 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 consumer rights can fall by the wayside. If we find evidence that businesses are failing to comply with consumer protection law then we will get tough – that means launching enforcement cases and moving to court action where there is a strong reason to do so.”