Beware costly claims firms cashing in on holiday chaos

Money Mail is today calling for a travel ombudsman to stop costly claims companies cashing in on airport chaos. Holidaymakers have been warned to brace themselves for a summer of cancellations and delays as airlines face a staffing crisis.

Complaints about flights have already soared by 544 per cent compared to last year, according to research by consumer website Resolver.

The law states that if your trip is cancelled your airline must refund you or arrange an alternative route.

Those who are given less than 14 days’ notice are entitled to up to £520 in compensation if a replacement flight delays your arrival by two or more hours.

If you are delayed by more than three hours and the airline is to blame, you can also claim compensation.

In theory, this should be paid out within a week — but a growing backlog means it could be months. 

And airlines have been accused of shirking their responsibilities, with thousands of travellers forced to lodge official complaints every year.

Even then, many could still be missing out because the current complaints system is so complicated.

Pocketing a cut

There is no single ombudsman service where disgruntled holidaymakers can seek help. Instead, airports and airlines can choose to sign up to one of five ‘alternative dispute resolution’ (ADR) services.

In the UK, the two schemes approved by watchdog the Civil Aviation Authority (CAA) are AviationADR and the Centre for Effective Dispute Resolution (CEDR). More than a dozen major airlines accounting for around 80 per cent of all passengers flying from the UK are signed up.

Yet when Money Mail searched ‘flight refund’ on Google — a search term which has doubled in use since last year — neither appeared on the first page of results.

Instead, three claims firms which had paid the internet giant to advertise were promoted at the top.

Airlines say they inform customers of which scheme they belong to on their websites.

But James Daley, managing director of Fairer Finance, says: ‘Google should be scrutinising the way it sells advertising more closely.

‘It does seem wrong that official dispute resolution services are not coming up [in online searches], and everyone is being directed towards more expensive claims firms.’

One firm, AirHelp, which pockets a 35 per cent cut of any payout, says it is taking on ten times more UK customers than last year.

Rival Flightright, which charges fees of up to 30 per cent plus VAT, has seen a 132 per cent increase in new cases.

Another firm, flightrefunds.org.uk, is re-posting unhappy holidaymakers’ messages on Twitter in an apparent bid to drum up business. However, there are no details about its charges on its website.

Asha Vare, legal expert at Flightright, says its fees enable it to ‘litigate on a large scale’, adding: ‘It is very difficult for air passengers to pursue their claims once the airline refuses payment.’

An AirHelp spokesman adds that its research suggests airlines ‘wrongly reject’ up to 58 per cent of valid claims.

Refund lottery

Most complaints received by dispute resolution schemes are about unpaid compensation for delayed and cancelled flights.

In the year up to April 7, around 7,833 such complaints were lodged with a dispute resolution service or the CAA. 

AviationADR registered 1,722 — 83 per cent of all of its cases — in the first three months of this year alone. CEDR received 602 — 93 per cent of its total.

AviationADR and the CEDR have 90 days to deal with a customer’s complaint once they have gathered details. In 2019, the CEDR took an average of 52 days to resolve disputes, according to a review commissioned by the CAA.

But AviationADR, whose members include Air France and easyJet, took more than twice as long, at 126 days. 

The firm insists a ‘software glitch’ distorted the results and says that it is not possible to compare the uphold rates on a like-for-like basis.

A note on its website suggests frustrated customers may have travelled to the office in person, advising them: ‘No update will be made available to you’.

The AviationADR scheme is, at least, free. CEDR, which counts British Airways among members, charges a £25 fee — only waived if a customer’s case is upheld.

CAA data shows 63 per cent of cases resolved between January and March were upheld in favour of passengers. This compares to a 28 per cent success rate at AviationADR.

Mr Daley says: ‘It is no surprise that more companies have signed up to a scheme that appears to side with airlines more frequently.’ 

But the CAA review states that it was ‘not to be inferred that passengers are more likely to receive compensation’ from either ADR body. 

The aviation watchdog can handle complaints about airlines not signed up to either scheme — such as Jet2 — but its rulings are not binding. So far this year, 56 per cent of cases went in favour of the customer.

Call for change

MPs are currently considering giving passengers automatic flight compensation payouts but this is unlikely to happen until next year at the earliest.

Some passengers are resorting to taking airlines to small claims courts, or sheriff courts in Scotland, to get compensation. But if they lose, there is a fee.

Consumer expert Martyn James says: ‘The industry is in need of a new, independent, free and mandatory ombudsman. 

Without it, passengers will continue to fall into the arms of expensive claims companies which charge hefty fees for claims passengers can often submit on their own.’

Rory Boland, Which? Travel editor, adds: ‘It’s been clear for some time that the current complaints system is broken.

‘Even when consumers lodge a claim with ADR themselves and do get a favourable ruling, some airlines have still ignored it. The Government can show it is standing up against brazen rule-breaking by airlines by introducing a mandatory, single ombudsman.’

Paul Smith, consumer director at the CAA, says: ‘The CAA supports proposals to mandate ADR for all airlines.’

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