Families are sitting on more than £130million of unused credit vouchers issued after their holidays were cancelled during the pandemic.
The aviation watchdog warned that travelers must use the vouchers by September 30, next year, or risk losing their money.
Tour operators must usually refund clients within 14 days after a cancellation of a holiday package.
However, in the face of fears about scores of businesses going bust if they had to make payments during the Covid crisis a large number of customers were asked to take credit cards instead.
Families are sitting on more than £130million of unused credit vouchers issued after their holidays were cancelled during the pandemic
These concerns raised outrage from consumer groups, who believed holiday-makers might be out of pocket in the event that their company collapses. Civil Aviation Authority finally intervened in July 2020. They promised to cover all of these credit notes under the Atol program, which protects holiday package customers from being left out of pocket if their business goes under.
The customers could be assured they can exchange the voucher to get a full refund regardless of what happened. This extra coverage ends at midnight December 19, according to the CAA.
If a customer cancels their trip, the company should offer a full refund. Anybody who offers a voucher instead of receiving a refund will be disqualified.
Sources in the industry said that credit cards had been too heavily used by the travel industry. As travel picks up, it is important that they stop relying too heavily on cash from customers to keep them afloat.
The CAA stated that extra cover would end on December 19 at midnight. (File photo)
The CAA reported an almost 300 per cent increase in airline passenger numbers in the third quarter of 2021 compared with the previous three months – although this is still a 72 per cent fall compared with the same period in 2019. The CAA is encouraging customers to redeem their vouchers for new holidays or to trade in to receive a refund. There are concerns that firms could be left reeling if they receive a lot of requests for refunds.
Unused vouchers that were used to cancel flights may be held by holidaymakers, and are therefore not covered under the Atol program. To avoid missing out, they are advised to verify expiry dates. Martyn James, of the complaints service Resolver, said: ‘Travel firms need to stop using customers as cash cows to prop up their businesses when they should be… offering them a cash refund.
‘Regulators must keep a close eye on firms to ensure customers who helped the industry by accepting vouchers do not lose out.’
Resolver claims that it has been subject to around 40,000 complaints regarding vouchers over the last two years.
Michael Budge, head of Atol at the CAA, said: ‘Refund credit notes have been a fantastic tool to reassure consumers and support the industry.
‘The decision to end the scheme reflects the changing of international travel restrictions, with significantly increased demand from consumers…due to the opening up of more destinations.’