One perhaps easily overlooked development amid the fast-moving coronavirus crisis has been the Competition and Markets Authority (CMA)’s creation of a COVID-19 taskforce to help protect consumers.

The taskforce was created in response to a significant rise in complaints from customers during the pandemic, largely about coronavirus-related cancellations and refunds.

To this end, the non-ministerial department of the UK government has made clear that the COVID-19 crisis has not brought about any relaxation in its rules on unfair trading practices and anti-competitive behaviour.

So, what should retailers be mindful of amid the competition authority’s focus on these aspects of how businesses are conducting themselves during the coronavirus situation?

What are the areas of focus for the CMA’s COVID-19 taskforce?

The CMA created its COVID-19 taskforce to investigate and instigate action against businesses that have refused refunds or introduced unnecessary complexity to the refunds process.

Other retailers’ behaviour being given greater scrutiny by the competition body include instances of customers being charged high administration or cancellation fees, or pressured into accepting vouchers instead of cash refunds.

Earlier in the pandemic, the CMA published an open letter to all businesses involved in organising package holidays for UK customers. The authority said that since the taskforce’s launch, it had

received more than 17,500 consumer complaints about traders that had provided misleading information and failed to give refunds within the 14-day deadline.

However, the package holiday industry is not the only one that has attracted concern since the onset of the COVID-19 outbreak, with other sectors potentially in line for CMA scrutiny in the coming months including holiday accommodation, wedding and private event venues, nurseries and childcare.

In what circumstances are retailers required to provide refunds?

Businesses are generally expected to issue refunds whenever they have cancelled a contract without supplying any of the requested goods or services, or where tier or lockdown conditions prevent them from providing the service.

Consumers must also be provided with refunds, in most cases, if they cancel or are unable to receive the requested service as a consequence of restrictions.

Exceptions to these requirements exist – for example, in the event of the customer having already received some benefit, or the goods or services being provided as part of a subscription – in which case, payment may be suspended or refunds limited.

Although the CMA does allow for vouchers, credits and rescheduling to be offered instead of a refund, it is crucial that customers are not obliged or misled into accepting such alternatives. The body also accepts that the current circumstances may result in refunds taking longer to be issued but still expects reasonable and clearly communicated timelines.

How are businesses responding to the CMA’s heightened monitoring?

Alert to the increasingly watchful eye of the competition authority, many businesses have moved to adapt their offering to customers beyond the legally required minimum – for example, by extending ‘change of mind’ returns until after the reopening of physical stores.

Such policies, in turn, may help cultivate greater customer trust in such businesses’ online and offline retail arms alike.

Our wealth of company secretarial services here at London Registrars could be instrumental in supporting your business through pandemic recovery – encompassing a range of company secretarial and business support services and the maintenance of statutory registers. Please reach out to our team today to find out more.

March 2021