Competition watchdog to investigate cancellation complaints

"The CMA acknowledges most businesses are acting reasonably in what are unprecedented circumstances, and the current crisis is placing everyone under pressure, but consumer rights cannot be ignored," said the authority.

On Thursday, the authority set out the instances "for most consumer contracts" in which it would expect a full refund to be paid.

These are: where a business has cancelled a contract without providing any of the promised goods or services; where no service is provided by a business, for example, because this is prevented by the restrictions that apply during the current lockdown; or where a consumer cancels or is prevented from receiving the service, for example, due to the restrictions that apply during the current lockdown.

The CMA has warned that where companies are failing to comply with the law, it will take "appropriate enforcement action".

"Our Covid-19 taskforce is shining a light on some of the big issues facing consumers in wake of this pandemic," said CMA chief executive Andrea Coscelli.

"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."

The taskforce was launched on 20 March to "scrutinise market developments" and compile evidence of firms breaching competition or consumer protection law.

Matt Buffey, CAA head of consumer protection, said: "We welcome the investigation from the Competition and Markets Authority (CMA) into cancellation rights and refunds and the statement on its view of how consumer protection law applies.

"We will continue to work alongside the CMA on this issue as it progresses. We expect airlines to provide refunds for cancelled flights as soon as practically possible."