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€4M in virus-cancelled-flight refunds wrung from operators
Pic: Shutterstock

14 Sep 2021 / regulation Print

€4M in axed-flight refunds wrung from operators

Travel cancellations made up the bulk of consumer complaints last year to the European Consumer Centre (ECC) Ireland.

The ECC’s annual report details a total of 8,035 consumer queries in 2020, in what it described as a “seminal year” in terms of consumer protection.

In 2019, the ECC team dealt with a total of 3,000 cases.

The ECC provides information and assistance to Irish consumers on their European Union rights and entitlements.

European consumers took 1,244 cases against Irish traders, 870 of which were successfully resolved.

Last year, the ECC received 5,867 reports by email, 2,473 by phone, and 45 via Twitter.

Legal assistance

The Competition and Consumer Protection Commission (CCPC) referred 4,019 cross-border complaints (8% out of its 2020 total) from Irish consumers to ECC Ireland for legal assistance and dispute resolution.

Cancelled and delayed flights resulted in numerous cases of air-passenger-rights infringement, the majority of which were covered by Regulation (EC) 261/2004, the overarching EU legal instrument establishing rules on compensation and assistance to passengers in the event of denied boarding, flight cancellations, or long delays.

The rest referred to airline liability in case of delay, damage, or loss of baggage and cargo.

The report adds that, due to the novel nature of pandemic-induced disruptions, some legislation at EU level did not prescribe for consumer remedies in these situations.

EU members states’ enacting of emergency national legislation also precluded the application of EU-level consumer-rights protections.

But upcoming EU consumer instruments due in 2021/22 will address the legacy of the pandemic, and empower individual consumers to claim their entitlements, along with institutional enforcement strategies, including enhanced cross-border cooperation.

Seamless enforcement

The ECC believes that this will lead to a more seamless and effective enforcement of consumer rights across the EU and the European Economic Area.

Over April-June 2020 alone, the organisation’s case numbers tripled compared with the same months in 2019 – mostly because of COVID-19 travel cancellations.

Air-travel issues (1,139), accommodation problems (155), and online shopping (236) accounted for the bulk of complaints received by ECC Ireland in a COVID-19-dominated year.

Most consumers who submitted complaints in relation to cross-border transactions last year were able to resolve their disputes directly with the traders after receiving information and assistance from ECC Ireland’s legal experts.

Where direct intervention by ECC Ireland staff on behalf of consumers was required, the organisation’s amicable solution rate in 2020 was 70%.

In 2020, as in previous years, air-passenger issues accounted for more than half (64%) of the total number of cross-border complaints received by ECC Ireland – and an increase of 130% compared with 2019.

At the virus onset, there were 5,000 complaints from consumers all over Europe against Irish airlines specifically.

ECC mass-resolved 4,000 of these complaints at source, with early refunds, largely for flights cancelled because of travel restrictions.

Unresponsive

The ECC said some aviation and travel-industry players “became unresponsive” to consumer-rights claims, and to sanctions by consumer-rights enforcement bodies.

The biggest consumer irritant was passengers receiving vouchers rather than cash refunds which, under EU consumer law, must be operated within seven days of the flight cancellation, and only with the passenger’s express agreement.

Vouchers must be valid for up to 12 months, at which point they should be eligible to be cashed in.

In many cases, airlines extended vouchers’ validity further into 2021 instead of operating refunds, which were unreasonably delayed or simply refused, the ECC has said.

Third-party booking issues

For third-party bookings, the refund process took even longer, as refunds had to be transferred from airlines to the passengers via intermediaries.

The parameters and limits of the liability and responsibilities of third-party booking agents and airlines were particularly unclear during the pandemic, the ECC points out.

Many consumers often found themselves being passed around between the airline and the booking intermediary, which often charged steep administration fees to liaise with the airline on the consumer’s behalf, and did not do so effectively.

Non-responsive or non-cooperative third-party booking agents made life particularly hard for passengers impacted by COVID-19 cancellations, especially when it came to refunds, the ECC adds.

Reimbursement procedures

As a consequence, some airlines changed their reimbursement procedures to allow a passenger to receive their refund owed directly from the airline, whereas, ordinarily, the refund would have been processed back via the third-party agent.

By the end of 2020, ECC Ireland and its sister offices across the EU member states, Norway and Iceland, secured cancelled flight reimbursements for Irish and EU passengers of over €4 million last year.

Out of a total of 55 complaints received by ECC Ireland, 17 were submitted by Irish consumers who encountered issues with car-rental companies based in another EU/EEA country. The remaining 38 came from European consumers who experienced problems with car-hire services in Ireland.

Virus-led shopping woes

Intensive virus-led shopping from non-EU jurisdictions with less regulated or non-applicable consumer protections also meant that enforcement of consumer protections was “a gruelling task”, the ECC report says.

Stock supplies, frequent transport stoppages, and unprecedented disruption on shipping routes and supply chains added to the difficulties of enforcing consumer protections.

A full 81% of Irish consumers shopped online in 2020, and 60% of all purchases were made from sellers based within the EU Single Market.

Of a total of 236 online shopping complaints, 117 came from consumers in Ireland against EU/EEA traders, and 214 were resolved through a dispute-assistance service.

ECC Ireland received 61 complaints against Irish companies, reflecting the fact that many of the world’s leading technology companies have their European headquarters in Ireland.

Complaints

Another sizable number of complaints came from Irish consumers against European companies (22), mostly British-based ones that went into administration.

In 2020, ECC Ireland also secured approval from the EU Commission to carry out a feasibility study on collaboration with third (non-EU) countries on consumer protection issues, specifically focused on e-commerce and tourist assistance.

Gazette Desk
Gazette.ie is the daily legal news site of the Law Society of Ireland