Wedding venues, hotels, holiday companies and nurseries that have refused to refund customers for bookings cancelled because of coronavirus are under investigation by the Government’s consumer branch.
The Competition and Markets Authority (CMA) said that four-fifths of Covid-19 related complaints concerned businesses that had failed to offer refunds when events or bookings were cancelled.
In some cases firms may have pressured customers to accept vouchers rather than a cash refund, it said.
Since the coronavirus pandemic began, holiday firms and wedding and events companies have been criticised for failing to offer refunds to customers whose bookings have been cancelled. Some have offered vouchers instead, but these often come with restrictions such as being limited to use in more expensive booking periods.
Nurseries and childcare providers will also be investigated by the watchdog. Some nurseries have taken monthly fees from parents even though the business has been temporarily closed.
The CMA said that most businesses were acting properly during the ongoing pandemic. However, it had concerns that firms in these sectors were ignoring customer rights.
If companies are found to have failed to comply with consumer law they can be taken to court by the regulator or ordered to rectify the situation. Customers can also launch legal action if they feel they have been unfairly treated.
In most cases, a full refund should be granted when the business has cancelled a contract and has not provided the agreed goods or services.
Andrea Coscelli, of the CMA, said: “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.”
Consumers have been asked to report firms who are refusing to offer refunds directly to the CMA.