Sykes Cottages reverses coronavirus refund policy after watchdog investigation

Many Sykes Cottages customers had previously been offered rebooking, vouchers or partial refunds – and MoneySavingExpert.com was inundated with complaints about the firm.

We reported complaints we'd had about Sykes Cottages and other firms to the Competition and Markets Authority (CMA), as well as to Trading Standards and the Government.

The CMA says complaints about Sykes Cottages make up a "significant proportion" of the 5,500 reports about holiday rental companies which have been received so far by its Covid-19 taskforce.

It says that it could have launched court proceedings against the firm if it hadn't changed its policy – though Sykes Cottages insists the "wheels were in motion" on its refunds policy before it was contacted by the watchdog.

Sykes Cottages and the 24 brands and businesses it owns – including the Pure Cottages Group and Carbis Bay Holidays – have now made a formal commitment to:

• Offer full cash refunds to customers whose holidays couldn't go ahead due to Government restrictions, as long as they haven't already rebooked.

• Convert unused credit vouchers to cash if the customer prefers this.

• Give monthly reports to the CMA about how many refund offers it has made and how many have been accepted.

Sykes's change of heart comes after another major UK holiday provider, Hoseasons, and its sister firm Cottages.com, reversed their refund policies last month following a backlash from customers.

See our Coronavirus Travel Rights guide for info on getting refunds for cancelled holidays and more.

Who is eligible for a full refund from Sykes Cottages?

Sykes Cottages has committed to offering a full cash refund to customers whose bookings were due to start during the initial lockdown period, when Government restrictions would have stopped the holiday from going ahead.

This applies to bookings starting from 23 March 2020, to Friday 3 July if the customer and/or accommodation is based in England, Sunday 12 July for Wales, Thursday 2 July for Scotland or Friday 26 June for Northern Ireland.

There are some exceptions though – for example, if you'd already cancelled your booking before 23 March 2020, or had actively requested a voucher or chosen to rebook even though you'd been offered a refund at the same time. If you'd accepted a voucher and have redeemed part or all of it already, you won't get a cash refund for any amount you've already spent.

You also won't get a refund from Sykes if you've received or are set to receive a refund from your bank through the chargeback scheme – though Sykes has also committed to not dispute chargeback claims from customers with cancelled bookings.

How can I get a refund for a Sykes Cottages booking?

If you think you're eligible for a cash refund, you can log in to your Sykes Cottages account to request one.

Sykes has also committed to contacting all affected customers by 31 July 2020 to offer them a refund directly (though if you'd already been offered the option of a refund, it won't need to contact you again). You should either get an email or a phone call, though it may also write to you if it can't contact you by email or phone.

If you choose to get a refund, you'll be offered the choice between a full cash refund (including commission and fees) OR a cash refund of the cost of your holiday excluding commission and fees plus a credit to the value of these costs uplifted by 10%, which can be used to book a future Sykes holiday within 24 months of receiving the credit.

Once you've requested or accepted a cash refund, this should be paid to your original payment method within 30 days.

What does the watchdog say?

CMA chief executive Andrea Coscelli said: "Our Covid-19 taskforce has received thousands of complaints about holiday rental firms, so it's good to see our action bringing results for consumers. Sykes is the second major holiday lets company to change its Covid-19 cancellations policy by offering full refunds following CMA intervention. We expect all companies to do so.

"As lockdown restrictions lift, consumers are still having to recoup their losses from cancelled holidays, which increases the financial worries which many people face. The CMA has shown it will act to protect consumer rights and enforce consumer law. Businesses must now do the right thing or risk similar enforcement action themselves."

What does Sykes Cottages say?

Graham Donoghue, chief executive of Sykes Holiday Cottages, said: "The last few months have been some of the most stressful for UK holidaymakers and most challenging for the sector's agents and operators.

"Whilst the majority of customers with bookings starting during the current lockdown period have successfully rearranged their holiday to a later date, we recognise that not all those have been able to or wanted to. Throughout June, more than 5,000 customers have received a full refund.

"Like many parts of the leisure industry, we have worked with the CMA, but the wheels were in motion on this before they got in touch."

What are my refund rights during the coronavirus pandemic?

In April, the CMA launched an investigation into complaints that some firms were failing to refund customers for coronavirus-related cancellations – with holiday accommodation providers highlighted as an area of particular concern.

At the same time, it issued a statement on its expectations about cancellations and refunds. This said that for most consumer contracts, it would expect a full refund to be issued if:

• A firm has cancelled the contract, and hasn't provided any of the promised goods and services.

• The firm hasn't provided any service – for example, because lockdown restrictions prevented it from doing so.

• A customer cancels or is prevented from using the service – again, an example would be if lockdown restrictions prevented them from accessing the service.

The CMA says many companies have voluntarily changed their policies following its statement, but says some are still denying refunds to customers and could face further intervention. It has also now expanded its investigation to include package holidays.

If you think you've been affected by an unfair cancellation term, you can report it to the CMA using its online form.