Ryanair Holdings PLC (LSE:RYA) has been found to ban passengers who received COVID-19-related refunds unless they returned the money.
An investigation by MoneySavingExpert.com revealed that people who had booked trips with the budget airline had been asked to pay it back, even days before they were due to depart.
READ: COVID-19 refund case against British Airways and Ryanair dropped by watchdog
Passengers received 'Chargeback' refunds worth between £400 and £630 as they couldn’t fly due to government advice against non-essential travel.
Chargeback is when a credit or debt card firm gives back a payment to the consumer for a service not provided, then charges the retailer for it.
According to the consumer advice website, the situation may be worsened after the UK competition authority dropped an investigation into Ryanair and IAG’s British Airways for refusing cash refunds to passengers on flights they couldn’t take due to lockdown restrictions.
IAG-owned British Airways offered vouchers or rebooking for affected passengers while Ryanair provided the option to rebook.
After an investigation, the CMA said that the law did not provide passengers with a sufficiently clear right to a refund in these circumstances to justify continuing with the case.
Consumer protection law says passengers are entitled to refunds when an airline cancels a flight but does not cover refunds when a flight goes ahead but passengers are legally prohibited from taking it.
Shares in Ryanair shed 2% to €16.64 on Tuesday morning.