Martin Lewis issues warning for holidaymakers about claiming refunds for cancelled flights

14 May 2020, 11:22 | Updated: 14 May 2020, 11:33

Martin Lewis has warned families about accepting vouchers or credit note refunds for cancelled flights.

Millions of Brits have been forced to cancel their holidays this year as the coronavirus pandemic continues to affect travel across the world.

But now Martin Lewis has some bad news for holidaymakers who are hoping to get their money back from flights.

Writing in the latest issue of his Money Saving Expert newsletter, the financial guru stated that if you have accepted a credit voucher, rather than cash, it could mean you are “unlikely to be able to claim on a debit/credit card if the firm goes bust”.

Some travel firms have been offering vouchers and credit notes, giving customers incentives to rebook in the future.

Cash refunds are also being given, but this can often only be done once a credit note refund has been accepted.

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Giving a major update on this, Martin has advised that those who are accepting a voucher would find it hard to claim on a debit or credit card if the firm is forced to close down.

He said: "I've been seeking confirmation on this for a while, and now I've got an answer, but it isn't great.

“If you've had a cancelled flight, by law you're entitled to a refund within a week, and the Competition and Markets Authority says other sectors should generally give cancellation refunds too.

“Yet many people are accepting vouchers - either rightly as they want to help the firm, or wrongly because firms are flouting rules, have refused refunds or made them difficult to get.

“In the travel sector, some firms are issuing 'refund credit notes' which are, they say, protected by ATOL - though this is untested. But most vouchers are just a call on the company, so if it goes bust you become a creditor and are unlikely to get money back.”

In usual circumstances, Martin would advise using chargeback or Section 75 to try and get a refund from your debit or credit card provider.

But when he asked the Financial Ombudsman if this could work here, they responded: “If a voucher is offered in full and final settlement of a claim, it might mean you aren't later able to make a Section 75 or chargeback claim."

Martin Lewis gives Heart listeners holiday advice

If you are affected by this, Martin advises to check the terms and conditions of any voucher or credit note issued to see whether you can claim a cash refund at a later date.

What are Chargeback and Section 75 and how can I claim?

Under chargeback, you can get your money back from your bank or building society if something goes wrong with a purchase you make on your debit card.

It is not a legal requirement, but a voluntary agreement between card providers and card issuers.

To start a claim, call your bank card provider and ask to dispute the transaction.

Section 75 of the Consumer Credit Act 1974 protects you on any purchases that you make on your credit card between the value of £100 and £30,000.

Under Section 75, the credit provider and the retailer are equally liable if something goes wrong with your purchase.

To start a claim, ask your lender for a claim form and fill it out online.

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