The association has included evidence from members, particularly SMEs, on the increasing problems they are facing with chargeback schemes in its communication to Scully.

Abta has highlighted problems such as “double dipping”, where customers are getting refunds from both the travel company and their card provider, late notification of chargeback claims, chargebacks lodged against the wrong trader in the chain, and difficulties with the dispute process. 

Luke Petherbridge, Abta’s director of public affairs, added: “The chargeback system is failing reputable travel companies, with the dispute resolution system appearing to be at risk of systemic collapse under the volume of Covid-related claims.

“All too often banks and merchant acquirers are applying insufficient checks to ensure that chargeback claims are justified.

“The wide-ranging problems with chargebacks are adding to the extremely difficult trading conditions and are being acutely felt by our travel agent members in particular. The additional cost is putting the future of some travel companies at risk.”

Abta has asked the government for an urgent meeting with officials and banking association UK Finance.