Ryanair customers may face charges of up to €100 to cash refund cheques

Ryanair has begun to issue refund cheques drawn on a German bank to Irish people who used travel agents to book flights that were cancelled due to the pandemic, and affected customers will likely face substantial bank charges and be forced to go into their banks to lodge the money as a result.

The issuing of the refund cheques has been described as “most unusual” by travel agents, who have condemned the move, suggesting that Ryanair is trying to “make it as difficult as possible” for customers to get refunds.

The cost of lodging a cheque drawn on a financial institution overseas can vary significantly depending on the bank but one person who tried to lodge a Ryanair refund cheque said he was told it could cost up as much as €100 per cheque which would be a substantial percentage of the cost of many bookings.

Customers have also said the airline is punishing them for using travel agents instead of booking directly with the airline. Ryanair has rejected the charges and insisted it is acting in the best interests of its customers.

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“These refund cheques have only started going out this week and it is likely that thousands of Irish customers will get them,” said the head of the Irish Travel Agents Association (ITAA), Pat Dawson.

“I think it is absolutely scandalous and they are doing it to frustrate people and to punish the people who book with travel agents,” he continued.

A reader contacted us to highlight the difficulties he had in cashing the refund cheque and the cost associated with it.  Pat Lynch got a cheque for €391.96 from Ryanair this week which was drawn on Citibank Europe in Frankfurt.

“I presented it to my bank who advised me to 'find a bank' with German clearing as they don't have it,” he said.

He was then told that his bank could take it “but it would take some time to cash/lodge and there would be a fee of between €20 and €100, depending on what the Germans charged. That's up to 25 per cent of the value". He checked with another bank, "and got the same advice.”

Before Covid-19 prompted airlines to cancel virtually all flights over a period of several months, Ryanair adopted a different policy when issuing refunds and would typically return the money to the travel agent’s account, who would then refund customers directly.

However, in recent months, the airline has refused to do that and pointed out that EU Flight Directive 261 says refunds have to be given directly to the customers rather than to third parties.

In recent months, the airline has sought details including ID, proof of address and bank account BIC and Iban numbers from customers who had booked cancelled flights through travel agents.

With those details it could return the money electronically to customers but has instead decided to issue what Mr Dawson described as "an out of date system that very few people are using today".

Dublin travel agent John Galligan told The Irish Times that because the cheques were drawn on a German bank, Irish customers here would be penalised when lodging them and he said that when the current crisis lifts his business will refuse to deal with what he said was "a trashy airline".

Mr Galligan said for years the standard practice when flights were cancelled was for the money to come back to the travel agent via their credit cards. “That has been the case for a long time but all of a sudden they do this. They know damn well that there will be substantial fees imposed by banks for handling them.”

He said that to the best of his knowledge Ryanair was unique in adopting this approach to refunding people who booked flights through travel agents.

“We all know that voucher schemes rely at least in part on people not redeeming the vouchers and it is the same for these cheques. By making it so difficult and costly for people to cash them, there will simply be people who will not bother or who will forget and all that money will end up going back to Ryanair.”

He said that “when this is all over we are not going to deal with trashy airlines like Ryanair, the question I will be asking is do we need this hassle from them?”

All customers who have booked directly with Ryanair and applied for a refund have received their refund directly back to their credit card.”

Ryanair has confirmed it has been issuing refund cheques but said it was acting in the best interests of its customers.

“Unfortunately, on too many occasions unauthorised screen scrapers and travel agents who have no commercial agreement with Ryanair, have held customers’ refunds for months after being paid by Ryanair,” a spokeswoman told The Irish Times.

“Ryanair has issued cheques as a safe form of payment to ensure customers who booked through unauthorised third party agents receive their flight refunds, and all Irish banks can process these cheques.”

She said that the airline was urging customers “to always book directly on Ryanair.com to avoid delays caused by unauthorised third party agents who deliberately change customer contact and payment details, which unnecessarily delays or blocks refunds.”