Banks must clear up confusion over refund entitlements, says Which?

Banks should be clearer about their approach to refund claims from customers who have reached a stalemate with businesses over cancelled trips and events due to coronavirus, according to Which?

The consumer group said it has heard from frustrated customers who have had claims turned down.

Some have been told a refund is not possible because they are being offered credit notes or vouchers by the business, Which? said.

Generally, people may be able to ask their financial firm to step in when they have been unable to get their money back from a business.

Under Section 75 of the Consumer Credit Act, credit card issuers are held jointly liable with businesses when goods or services are not received – as long as their value is between £100 and £30,000.

Another process people can use to try to get their money back is chargeback – which allows card customers to ask for a payment to be reversed.

Which? said it has heard from some banks that claims would need to be handled on a case-by-case basis.

It said a failure to provide even general information about the circumstances where a claim could be successful risks leaving consumers unaware of vital consumer protections – at a time when people’s finances are significantly stretched.

The consumer group is calling for the industry to be more up-front about the situations where chargeback and Section 75 are likely to be appropriate for consumers in relation to coronavirus-related cancellations.

Gareth Shaw, head of money at Which?, said: “While it is a very difficult time for businesses, the coronavirus outbreak has also put people’s finances under considerable pressure, and they deserve to get their money back if they want a refund for a cancelled event or trip, rather than a voucher or the option to re-book.

“However, there is clearly confusion about the circumstances which allow banks to help their customers achieve this. There needs to be greater clarity and consistency about claiming through banks, and the industry should ensure that all bank customers have a fair chance of getting their money back.”

A spokeswoman for trade association UK Finance said: “Paying with a credit or debit card can provide customers with additional protection if something goes wrong.

“The circumstances under which a refund can be made may be complicated so we would always advise customers who are unable to resolve a complaint with the retailer, and have paid using their credit or debit card, to check with their bank, building society or card issuer.”