John de Vial, Abta’s director of financial protection, told a business and finance seminar hosted by accountancy firm Elman Wall on Thursday (2 April) that card issuers should not process chargebacks against agents without asking questions first when it is not the agent in breach of contract, and urged the trade “not to take them lying down”.
De Vial highlighted, by way of example, how some airlines were not meeting refund obligations under EU261. “The easy route for consumers [in these circumstances] is chargeback,” he said.
Alan Bowen, legal advisor to the Association of Atol companies, told TTG’s second Business Support Live session on Friday (3 April) that under the Consumer Credit Act (CCA), chargebacks come into play when it is alleged the supplier is in breach of contract, or hasn’t provided a paid-for service.
Kemp Little partner Farina Azam said agents should proactively respond to any chargebacks claims.
“Don’t sit on them, get your response sorted,” she said. “I’ve been helping clients compile draft responses. Agents have a defence under Section 75 [of the CCA] that they’re not the supplier.”
This defence, said Azam, rested on agents demonstrating who the supplier is, and that their own T&Cs state they are acting as an agent.
De Vial added it was vital a temporary “voucher" or "credit note” regime, which has been championed by Abta in lieu of refunds to ensure businesses whose clients also act as creditors don’t collapse under the demand for refunds, was put on a legal footing, and called on the Department for Business, Energy and Industrial Strategy to amend the Package Travel Regulations to allow this.
“This is a crisis though, we can’t wait for government to act,” he said. “But we do need to get this on a legal basis because the simple fact is the way around it for consumers will be the CCA and chargeback claims.”
*Travel professionals can download the Visa and Mastercard Covid19 guidance notes to which John de Vial refers in the video here:
Visa
Mastercard
