REGULATION ‘We’re in a similar position to a year ago’
But it’s hard to see how that would not be the practical effect. I would be surprised if the government took that forward. “The other point is the limit
could apply to the total price, the average cost per customer, the size of deposit or something else. Depending on what they go with, it has the potential to create so many loopholes to avoid creating packages.” Given the difficulty of paying refunds
during the first months of the pandemic, the proposals also raise the prospect of a new category of “extreme extenuating circumstances” to waive the 14-day refund rule. Golding noted: “The interesting point here is how that will be defined. We have a definition of ‘unavoidable and extraordinary circumstances’ in the PTRs already. One would assume ‘extenuating circumstances’ would need to be different.” In the same vein, the proposals raise the
prospect of clarifying an organiser’s right to seek refunds from suppliers for cancelled packages. In the meantime, a High Court ruling in October secured just such a refund for On the Beach from Ryanair. *ROGLQJ QRWHG “7KH TXHVWLRQ LQ 2QbWKH
%HDFK Y 5\DQDLU ZDV GRHV 5HJXODWLRQb of the PTRs confer a free-standing right of action for organisers to recover losses caused by third parties? The High Court found it does and in a summary judgment, with the judge deciding the issue did not need to go to a full trial. That was fantastic news for the industry in terms of its ability to recover monies from suppliers where they’ve had to pay out under the PTRs.”
DIGITAL MARKETS, COMPETITION AND CONSUMER BILL The Digital Markets, Competition and Consumer Bill (DMCC) is a major piece of legislation due to come into force this year. Golding explained: “The key thing from the industry’s perspective are the new powers to be given to the Competition and Markets Authority (CMA) to enforce consumer law. “Currently when the CMA suspects a
40 Travel Weekly Insight Report 2024 FIGURE 50:
AIRLINE FARES COMPARISON
‘It’s easy to understand cost of flights and to compare airlines’
Don’t know Disagree 6%
20% 17%
+40pt 57% net %pt agree
Neither agree nor disagree
Agree Source: CAA Consumer Survey, October 2022 Base: 3,500 UK adults
breach of consumer law, it faces a long, drawn-out process. The CMA can take criminal and civil actions, but it relies on the courts, which is time-consuming and expensive. Partly as a result, a lot of CMA actions are resolved by seeking undertakings from businesses. “That is going to change. The DMCC
gives the CMA powers to investigate suspected infringements of consumer law, to decide whether there has been a breach and to take action ranging from requiring a business to comply with directions to imposing fines of up to £300,000 or 10% of relevant turnover. “The CMA has had a focus on the
travel industry going back almost a decade. But when it has suspected non- compliance with consumer law, it has been disincentivised from taking enforcement action by the current process. Now it will be able to make its own decisions and levy fines, so it will change how consumer law is enforced. The onus will be on businesses to contest CMA rulings in the courts.” He added: “The government is also
revoking Consumer Protection from Unfair Trading Regulations and recreating the legal effects under the DMCC. An area it has said it will consult on is a ban on fake reviews, and a ban on hosting reviews without taking reasonable steps to check they are genuine. A lot of travel businesses host online reviews, so businesses would be obliged to show they had taken reasonable steps to ensure the reviews were genuine.” The government has also promised
MORE than half UK consumers found it ‘easy’ to compare airfares, according to a
CAA survey, despite the government considering regulating ‘drip pricing’ by airlines and others (Figure 50)
a consultation and action on ‘drip pricing’, in particular by airlines. Golding said: “I understand the concern around drip pricing, but many airlines would say, ‘It just reflects the variety of choice.’ Does everything have to go in the upfront price, every possible add-on? If so, how do you present the price in a way that isn’t offputting?” Deloitte audit and assurance director
Tim Robinson noted: “The consumer wants comparability, so it needs to be a realistic price, not a headline price that no one pays in reality.”
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