Banks urged to clear up confusion over coronavirus refunds

Consumer group Which? says customers have been refused refunds because they were offered credit notes or vouchers by businesses

Banks are being urged to end consumer confusion about how to get refunds during the coronavirus outbreak.

Consumer group Which? says it has heard from thousands of unhappy people unable to get refunds from their bank after coronavirus forced companies such as travel firms to shut.

Under Section 75 of the Consumer Credit Act 1974 credit card users can claim against the card issuer or retailer on purchases from £100 to £30,000.

Consumers are also protected under chargeback, which allows a customer to reverse a transaction if they cannot resolve a dispute.

What is the problem?

Some bank customers have been told they cannot get a refund because they have been offered credit notes or vouchers by businesses.

Some banks are dealing with claims on an individual basis, according to Which?

Which? says the number of people using the chargeback tool on its website to make claims against credit card and debit card companies rose ten-fold since the beginning of the year to 10,000 a month.

What does Which? want?

To reduce confusion over the protections the banks offer, Which? says it wants banks to be clearer about customers' refund options.

Gareth Shaw, head of money at Which?, says: “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 rebook.

“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 says: “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.”