The CMA shining a light on consumer issues in light of Covid-19

As we all know, the current Government restrictions mean that, since March, upcoming events and holidays have had to be cancelled or postponed for an indefinite period of time, leaving both businesses in the retail, leisure and hospitality sector and their customers in a precarious position. 

The Competition and Markets Authority (CMA) has formed a dedicated Covid-19 Taskforce which has identified 3 sectors of particular concern for consumers:

• weddings and private events;
• holiday accommodation; and
• nurseries and childcare providers.

These industries have been hit particularly hard by the lockdown measures. As a result, the main consumer issues identified by the CMA relate to cancellations and refunds, in particular businesses refusing to issue refunds or encouraging customers to accept vouchers instead / making it unduly difficult for consumers to access refunds.

Helpfully, the CMA has issued a statement setting out when a full refund would be expected, namely where:

• a business has cancelled a contract without providing any of the promised goods or services;
• no service is provided by a business, for example because this is prevented by the restrictions that apply during the current lockdown; or
• a consumer cancels or is prevented from receiving the service, for example due to the restrictions that apply during the current lockdown.

The findings of the CMA appear to show that some businesses are nevertheless resisting issuing refunds to their consumers in these circumstances, potentially opening themselves up to consumer rights claims.

Where companies are issuing refunds, the CMA has acknowledged that, in these circumstances, it might take longer than usual to process these. However, the timeframe should nevertheless be made clear to consumers and given within a reasonable time.

This CMA Taskforce and Government update shows that consumer rights are still being taken seriously during this pandemic.