Watchdog is eyeing three sectors over refund issue

Holiday accommodation, weddings and childcare are areas of particular concern

Complaints about nurseries and childcare providers, wedding companies and those offering holiday accommodation failing to refund people for services not provided are being investigated by the competition watchdog.

The Competition and Markets Authority (CMA) said complaints around cancellations and refunds account for four in five of those received by its Covid-19 taskforce.

Concerns include businesses refusing refunds or pressuring people to accept vouchers for holiday accommodation, which can only be used during a more expensive period.

The watchdog said consumer rights cannot be ignored. Businesses should also not be profiting by “double recovering” their money from the government and customers.

The CMA said it has identified three sectors of particular concern – weddings and private events, holiday accommodation, and nurseries and childcare providers. It will tackle these as a priority and then move on to other sectors, based on the information received by the taskforce.

However, it said most businesses are acting reasonably in unprecedented circumstances.

The CMA outlined its views on consumer protection law in relation to cancellations and refunds in the crisis.

For most consumer contracts the CMA would expect a full refund to be issued where a business has cancelled a contract without providing any of the promised goods or services; no service is provided by a business, for example, because this is prevented by lockdown restrictions; and a customer cancels or is prevented from receiving the service, for example, due to lockdown restrictions.

If people have been affected by unfair cancellation terms they can report them to the CMA using an online form at coronavirus-businesscomplaint.service.gov.uk

The CMA cannot respond directly to every complaint, but the information provided will help decide which issues to address as part of its work.

Purnima Tanuku, chief executive of the National Day Nurseries Association, said: “Nurseries as consumers have their own concerns especially about how insurance cover is working for them as this is leaving them exposed to losses.

“We have also raised concerns with the CMA previously about how government funding is affecting the childcare market which is already pushing them to the brink.”

Neil Leitch, chief executive of the Early Years Alliance, said inadequate funding has put huge pressure on providers.

CMA chief executive Andrea Coscelli said the Covid-19 taskforce is shining a light on some of the big issues facing consumers in the wake of the pandemic. Alongside price-gouging reports, they are now seeing cancellation issues in their thousands.