Chargeback – When the Industry fights back, & wins!

I have spoken many times about my frustrations of the chargeback process. Especially when those chargebacks are erroneously, ignorantly and sometimes fraudulently made against agents; agents who have no legal or contractual liability for the provision of travel services but yet end up on the receiving end of the chargeback process. Time and time again, banks and card providers overlook the facts (and the law!) and simply say ‘computer says yes’, resulting in recovery for the consumer, and a double loss for the agent.

I am a real advocate for the industry fighting back in these types of scenarios and pursuing customers who abuse the chargeback process in this way. This week, we saw one such case.

You don’t have to just ‘let it go’!

Southall Travel are an award winning travel company, selling packages and independent travel services alike. Like many travel companies, depending on how they sell their services, they can act in the capacity of either an Organiser or an Agent, as is made clear in their Terms and Conditions.

In this specific instance, the customer made a flight only booking, for return flights to Karachi. The flights cost a total of £752.64. Being a single travel service, the booking was not a package and Southall made perfectly clear at all stages of the booking process that they were simply acting as agent on behalf of the airline – Turkish Airlines.

The outbound flight went ahead without issue; however the customer’s return flight was cancelled by the airline. The airline failed to provide the customer with any assistance, resulting in the customer having to source additional accommodation, and their own return flights, thus incurring significant cost. Southall Travel, in their role as agent, did all that they could to assist the customer in returning home, but maintained that they were not responsible for any financial loss. This lay with the airline.

Upon returning home, the customer raised a chargeback against Southall Travel and received a refund for both the outgoing and return flight. The chargeback was upheld even though Southall had acted as agent, had never even received the sum of £752.64 (paid direct to the airline) and the customer had actually travelled on the outgoing flight!

Many agents would simply ‘let this go’. It was a reasonably small sum, and perhaps not worth arguing over. Not Southall Travel!

You can make your case!

Southall Travel commenced a legal claim against the customer in the small claims court, arguing that a) the chargeback should never have been awarded against them in the first place, as they were acting only as agent, and b) in any event, the customer had been unjustly enriched; having availed of the outbound flight on the booking, yet claiming for and receiving a refund for the same.

The customer counterclaimed against Southall Travel, seeking the sum of £2,868.30 to cover the costs of their replacement return flights and accommodation.

The matter was heard before Romford County Court on 2^nd August, where judgment was awarded in favour of Southall Travel. The customer’s counterclaim was dismissed in its entirety and they were instead ordered to reimburse Southall for the cost of the flights that had been previously awarded under the chargeback process.

In their Judgment, DDJ Greenwood stated: “It seems to me clear that the contract between Southall Travel and [the customer] is limited to Southall Travel facilitating a further contract with Turkish Air… I find that there is no basis in law for which [the customers] may obtain compensation for which they seek from Southall Travel. Any contract that would provide for compensation would be between the customer and Turkish Airways.

On behalf of Southall Travel, it was submitted that they have essentially been unjustly enriched. It seems to me that Southall Travel’s position in respect of the law must be correct

Closing Remarks

Cases like this are far too common; and what is just as common is travel companies feeling that they have no source of recourse especially when the cost of doing so may well outweigh the value of the claim being sought. In this case, the claim value was under £800. Southall made numerous attempts to liaise and settle the matter with the customers without the need for formal action, but when this proved impossible, they stood up for what is right and brought the matter before the courts. It is great to see companies such as Southall Travel fighting back and others in the industry should be encouraged to do the same!

Krystene Bousfield