It is well known that the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (“CCRs”) introduced a 14 day “cooling off” period into consumer contracts concluded online, during which the consumer can cancel the contract and claim a full refund.
However, there is no such right given to consumers who book holiday accommodation online for a specific date or dates, partly because of the difficulty for the supplier in finding alternative customers at short notice.
Although under the CCRs such consumers have no general right to cancel, online accommodation providers still need to be careful not to fall foul of the fairness requirement of the Consumer Rights Act 2015 (the “CRA”).
In the event of the cancellation by the consumer of a booking for holiday accommodation, suppliers commonly seek to:
- charge a cancellation fee;
- withhold some or all of any deposit paid by the consumer, to compensate for the supplier’s financial loss; and / or
- demand further money to cover any loss not covered by the deposit.
However, failure by the supplier to attempt to accurately estimate its losses and charge the consumer accordingly could be construed as unfair under the CRA and therefore unenforceable.
Any amount withheld or demanded by the supplier on cancellation by the consumer should represent a genuine pre-estimate of the losses they may suffer as a result of the cancellation. Suppliers may use a ‘sliding scale’ cancellation policy, enabling them to reduce the amount of refund the customer is entitled to as the booking date approaches to reflect the increasing difficulty for the supplier to find an alternative booking at short notice.