In a widely covered effort to protect businesses in the tourism sector, some EU countries have sided with airlines and tour operators with an aim to disregard passengers’ right to a monetary refund for canceled flights and postponed tours. However, such attempts have attracted the attention of the European Commission, which have already demonstrated a high mind while trying to protect consumer rights in the region.
The European Commission has announced that it is launching the first phase of infringement proceedings against states that violate travelers’ rights, namely the right to get a timely refund for canceled trips.
After the incredibly wide wave of flight cancellations due to the COVID-19 pandemic, some EU countries have decided to reduce the losses incurred by airlines and tour operators at the expense of consumers by allowing service providers not to pay consumers in cash, but offer them travel vouchers instead. In addition, in late April, 16 EU countries asked the European Commission to suspend EU rules obliging businesses to monetary returns for unused services.
However, from the very first days of the pandemic, the European Commission has taken a firm position that, even in this case, passengers’ right to a refund will remain. Nevertheless, some states have tried to change the rules on their own, in violation of basic consumer rights. Such attempts were also made in Lithuania, when the Parliament adopted an amendment to the Civil Code so that tour operators could return money to customers within a period of 6 months – instead of 14 days. Later, realizing that such amendments violated the law of the European Union, the MPs themselves asked the President to veto such amendments.
EU has already established strict measures to protect the passengers
Attorney at law Nerijus Zaleckas, who has been representing interests of passengers as well as the clients of Skycop for many years and is, explains that European Union law has clear and strict passenger protection mechanisms that oblige both tour operators and airlines to make a full monetary refund in case of travel flights or postponed trips. In the event of cancellation, Regulation 261/2004 provides that the full price of the ticket must be reimbursed to passengers within 7 days after the request has been made. Under Article 6.751 of the Civil Code, which implements Directive 2015/2302, in the event of such a trip, the tour operator must reimburse all the money paid by the traveller in a full amount no later than 14 days from the date of termination of the contract.
In both cases, coupons can only be used to pay consumers if they agree. On May 13, The European Commission issued guidelines on the possibility to offer coupons instead of a refund for travellers affected by travel or flight cancellations. The Commission reiterated that the right of travellers to a refund remains unchanged and that, in order to make coupons an alluring option, EU member states should guarantee they protect consumers from the possible consequences of the tour operator’s or airline’s bankruptcy.
“Such proposition obviously has its logic” – points out Mr. Zaleckas. “But it wasn’t just tour operators or airlines who are facing financial difficulties. Travellers may need more money right now than they did ever before, so it is illegal to force coupons that may not even be available.” So, as there is emphasised, in their pursuit to find necessary solutions, states take illegal measures, which may lead to the situation when the country itself will have to face a financial penalty. In addition, illegal decisions may lead to compensation for travellers who themselves will sue the country.
EU member states could face the consequences
“Both the Court of Justice of the European Union and the Supreme Court of Lithuania have repeatedly stated that the protection of consumer rights is in the public interest, therefore states must be very careful in their decisions. States are likely to face judicial scrutiny in the near future regarding the legitimacy of decisions and restrictions taken during the COVID-19 pandemic. On April 23, the Prague court has already ruled that the Czech authorities have exceeded the limits of their competence by imposing certain restrictions. During the quarantine in Lithuania, the Government also adopted bans and restrictions on questionable legality for both people and businesses, which is likely to lead to an avalanche of lawsuits against the state. Entrepreneurs are already interested in the possibilities of compensation for the damage caused” says Mr. Zaleckas.
Sigitas Kačiušis, a representative of Skycop, a company that helps passengers recover compensation for canceled or delayed flights, says that passengers receive several times more inquiries about the possibility of recovering money paid for tickets.
“Taking advantage of this situation, airlines are trying to evade the obligation to reimburse passengers for their tickets. Many passengers have indicated that airlines do not even offer a choice between a refund and a voucher and are forcibly offering coupons as the only option, while simply ignoring passengers ’ requests for a refund. In this case, going to court could be simply the one option for the passengers affected, ”advises S. Kačiušis.
The European Commission has now sent formal notices to countries that are not taking steps to ensure consumer protection – and this is the first step in investigating an infringement. If the situation is not remedied, States may be fined when such proceedings will be completed.