Government asks travel firms to clear pending refunds or face legal action

Thousands of consumers have complained to the CCPA and the Department of Consumer Affairs about refunds

The central government has asked all travel companies to process consumer refunds pending from Covid lockdown times by the third week of this month or face legal action.

The deadline was set by the Central Consumer Protection Authority at a meeting chaired by consumer affairs secretary Rohit Kumar Singh on November 8.

The meeting followed the issue of refund notices by the CCPA to six online travel platforms – EaseMyTrip, Yatra, MakeMyTrip, HappyEasyGo, ClearTrip and Ixigo – and five travel agencies: Thomas Cook, Kesari Tours, Veena World, Neem Holidays and Mango Holidays.

While Ixigo and Thomas Cook have cleared all their refunds, the others were yet to process them in entirety.

The government did not reveal the total amount pending. However, a senior official who attended the meeting told Moneycontrol that Rs 45 crore to Rs 50 crore of refunds are overdue.

"We estimate that around 8,000 refunds are still pending with travel agents and travel platforms," the official said.

Thousands of consumers have complained to the CCPA and the Department of Consumer Affairs about refunds yet to be received from airlines, online travel portals, and local travel agents. The refunds were on account of travel that was cancelled during the Covid-19 lockdown periods of 2020 and 2021.

As many as 5,695 refunds are pending at Yatra.com, 63 on MakeMyTrip, and one booking for four passengers on EaseMyTrip. Refunds of Rs 14.75 lakh are pending at Mango Holidays.

Legal action

"Failure to comply may result in the CCPA initiating legal action, including filing a contempt petition against the companies in the Supreme Court," the government said in a statement on November 8 after the meeting.

The consumer affairs department called a meeting with the civil aviation ministry, the Directorate General of Civil Aviation, online travel agents, local travel agents, and airlines on November 4 after it received almost 10,000 complaints through the National Consumer Helpline over the past 7-8 months.

Another senior official who attended the meeting told Moneycontrol that travel portals had initially put up some resistance to providing the refunds.

"But the CCPA's hard stance of this being a dark pattern and continuous follow-ups forcing them to credit the refunds has worked," the second official said. "Their one argument for pending refunds was that they were unable to contact the persons concerned. We have asked them to display details in a notice on their websites prominently and customers will come by themselves."

Dark patterns refer to strategies by websites and apps to make users act in ways they did not intend to or discourage behaviour that’s not advantageous to the companies.

Kesari Tours, Mango Holidays, and Veena World have filed a petition in court against the CCPA’s orders to issue the refunds. Neem Holidays is under investigation by the CCPA.

The CCPA had issued notices to six travel platforms after the Supreme Court order of October 1, 2020, directing them to immediately refund consumers. Only two – Thomas Cook and Ixigo – have cleared the refunds until now.

Need for ombudsman 

The government also discussed ways to set up an ombudsman or an authority to resolve consumer grievances related to aviation.

“The Ministry of Civil Aviation and the Department of Consumer Affairs can jointly work on the modalities involved in establishing the same,” the government said.

According to data that Moneycontrol reviewed, about 40 percent of the 10,000 complaints were about fares not being refunded despite the cancelation of bookings, and 14 percent were about services not meeting expectations as promised by airlines.

Another 14 percent of the complainants were about not getting compensation for lost or damaged baggage. Other problems included delays in refunds from airlines, denial of boarding, and unavailability of free seats at the time of booking and web check-ins.

While airlines did not attend the November 8 meeting, the aviation ministry will hold separate meetings with them to address these issues. Discussions on paying to book seats will be taken forward by the ministry, the second official said.

"Airlines have asked for time to compile the data for consumer refunds and pending complaints. MoCA will cross-verify the data we receive from airlines with the complaints received," the first official said.