easyHotel Won't Refund Us - Fraud?

[NicoTarquinio]

Hello there,

 

I am a U.S. Citizen, so I'm not entirely sure how much help I'm entitled under English law. Last summer, my wife and I booked a week's vacation with easyHotel in South Kensington for this coming summer. There was an unexplained charge in our bank account for easyHotel, which was concerning to us. easyHotel has no phone number listed to contact them by, so we sent a query through their online help desk, which purports to respond within two days. It took well over a month to get a response--as it turns out, our bank had mistakenly billed us but listed the charge as coming from easyHotel. While that wasn't their fault, the lapse in communication made us uncomfortable, and we cancelled our booking in late 2012.

 

In January, I sent another query to their help desk asking when I can expect a refund. It has been over two months. I have just sent them another query, but that'll probably do little good.

 

As it turns out, easyHotel's refund policy (poorly-worded and somewhat buried in the language of their Terms and Conditions) says something to the effect of they retain your money for twelve months afterwards to be used on subsequent bookings, and have the right to keep the money after that point. This is unconscionable. Yes, I should have read the Terms and Conditions. However, with such a well-known hotel, I would have never imagined them to have such an awful practice.

 

I know that in American contract law, a clause like that would probably be legally unenforceable as it's pretty one-sided, unusual, and more or less hidden in easyHotel's Terms and Conditions. But I don't know what remedies would be available to me against an English company. Does anyone have any advice? Are there any English equivalents to America's Better Business Bureau that might help? Thank you so much in advance for your consideration.

Edited March 14, 2013 by NicoTarquinio

[BankFodder]

I can scarcely believe that they have inserted that as a term of the contract.

Please would you reproduce the exact term here and give us a link to it.

 

There is no doubt in my mind that the term is unfair and is in breach of the Unfair Terms in Consumer Contracts Regs.

 

Your problem is that if you are in the USA, then you will have difficulty in bringing a claim in the courts.

However, you are able to bring a claim using our online MoneyClaim system - but you would need a UK address for service of documnents.

 

How much money are you talking about here?

[NicoTarquinio]

Howdy, BankFodder! Thanks for the quick response. Yeah, I figured there'd be a jurisdictional issue. I have no UK address to speak of.

 

I'd link you the T&C, but I need at least 10 posts on this forum to do so.

 

The relevant terms are as followed (emphasis/boldface added):

 

3. Transfers and cancellations

 

 

(a) There will be an administration charge (£10) debited to your account with us if you wish to amend your booking in any way or to cancel your booking after it has been made. If you cancel, your account with us will be re-credited with the amount you have already paid with the administration charge being debited, and the net amount will then be held in your account with us as future payment for other accommodation booked through easyHotel.com. Any credits must be used within one year of the date of amendment or cancellation.

 

(b) All reservations are taken in good faith. Should we be unable to let the room that you have booked, we will use our best endeavours to find alternative accommodation nearby at a price and standard as close to the easyHotel.com price as possible

 

© In the unlikely event of a room being unavailable for you, we will credit your account with the price you have paid (either in full or on a pro rata basis, whichever is appropriate) without deduction of any administration charge and you will be entitled to book further accommodation with us. You will be responsible for paying all charges at any alternative accomodation offered to you.

 

(d) All transfers and cancellations must be done on line and completed 24 hours before your arrival - You cannot cancel a reservation on the day of arrival

 

For multi - night bookings - you cannot cancel on the day of arrival for that day, but you are able to cancel any remaining nights.

So, it seems that they hold the money for a year after the cancellation, at which point they take it. I mean, it seems like a pretty fundamental breach of contract (under U.S. law). Their offer was for the week I intended to book for, I accepted, giving consideration. I cancelled well in advance (nearly a year), and their refusal to refund the consideration is a bit of a windfall to them since they're providing nothing in return.

 

It was about $500.00 USD (about £ 332). I'm half-ready to suck it up and rush out there for a vacation, but I can barely afford it and with the way they've treated us thus far (months for simple responses to customer service issues) I would hate to stay at easyHotel.

[assisted blonde]

The conditions on the website vary a little from what you have put here.

[NicoTarquinio]

assisted blonde: my apologies, it looks as if I posted you the text of the pre-June 2010 T&C as opposed to the current one. As you can see below, while the text is different, the substance of the policy is the same! When easyHotel refers to an "Account," they refer to an Account they hold, not your personal bank account.

 

3. Amendments and cancellations

 

 

(a) An administration charge of £10 ("the Charge") will apply if you amend or cancel your booking after it has been confirmed by us.

 

(b) Cancellations or amendments to your booking must be completed before 3pm on the day prior to your original check-in date. You cannot cancel a booking after this time. Any credit arising as a result of an amendment or cancellation will be credited to your Account minus the Charge. If you cancel or amend your booking after 3pm on the day before your original check-in date, you will not receive any credit for the first night of your booking. If your booking was for more than one night, your Account will be credited (in the currency you paid in) for the amount you paid for any subsequent cancelled night(s), minus the Charge.

 

© Once you have checked in to your easyHotel you cannot amend or cancel the related booking. Should you wish to check out before your scheduled departure date, you must advise the hotel before 3.00pm on the day prior to your new check out date. in such an event we will credit the cost of the night(s) cancelled to your Account, minus the Charge.

 

(d) If you do not arrive at the easyHotel to which your booking relates by 10am on the morning after the first night of your booking, you will not receive any credit to your Account for the first night of your booking. All subsequent nights of your booking will be automatically cancelled and the amount you paid for them credited to your Account minus the Charge.

 

(e) An Account credit can be used as payment for future easyHotel bookings but must be used within 12 months of the date of the amendment or cancellation to which it relates.

 

(f) All bookings are accepted by us in good faith. Should we be unable to provide you with a room that you have booked, whether because of the events set out in clause 14 below or otherwise, we will use all reasonable endeavours to find alternative accommodation nearby which is of a similar standard at no extra charge.

 

(g) In the unlikely event of a room being unavailable for you under clause 3(f) or if the room offered is not acceptable to you, we will credit your Account with the price you have paid for your easyHotel booking (either in full or on a pro rata basis, whichever is appropriate) without deduction of a Charge. You will be responsible for paying all other additional charges for extras at any alternative accommodation offered to you.

[assisted blonde]

Thats fine I was just getting a bit confused and wondered if us sites had different wording, it looks like they are basically saying they dont give refunds, travel insurance wont help at the moment as it is a cancellation because you changed your mind. did you at any point agree to open an account of some sort or join a club etc etc. easyhotels seem to be a franchise this one is operated by a company called Tiamat ltd registered in Jersey TBH I am not sure what your next move would be, but as a matter of interest how did you pay for this was it a credit card? if it was you may be able to claim it back from them.

[NicoTarquinio]

Thats fine I was just getting a bit confused and wondered if us sites had different wording, it looks like they are basically saying they dont give refunds, travel insurance wont help at the moment as it is a cancellation because you changed your mind. did you at any point agree to open an account of some sort or join a club etc etc. easyhotels seem to be a franchise this one is operated by a company called Tiamat ltd registered in Jersey TBH I am not sure what your next move would be, but as a matter of interest how did you pay for this was it a credit card? if it was you may be able to claim it back from them.

 

Well, they responded to my request for a refund:

 

Dear Niko,

 

I am sorry that you had to cancel your booking.

 

Unfortunately we do not offer refunds for cancellations. As an integral part of the process of making a reservation we do require that you read and accept our Terms and Conditions before you are able to confirm your purchase. This particular condition relating to cancellation is very common for pre-purchased low cost hotel products and more generally in the wider budget travel sector.

I do genuinely regret that you feel that there is unfairness about the terms of our cancellation policy. We do strive to set out the terms that apply to the booking of an easyHotel, in a manner which, is both clear and at a point in the reservation process before a customer commits to a purchase.

 

Kind regards,

Luis

 

I responded to him with citations to relevant contract laws, like:

 

"Terms are always likely to be considered unfair if they exclude the consumer's rights under contract law to the advantage of the supplier. A basic right of this kind is to receive a refund of prepayments made under a contract which does not go ahead, or which ends before any significant benefit is enjoyed."

Citing the Office of Fair Trading, Group 4.

"Where customers cancel without any such justification, and the supplier suffers loss as a result, they cannot expect a full refund of all prepayments." Id. 4.3.

And:

 

"In principle, there may be no objection to a financial penalty for pulling out of the contract that applies equally to both parties. In practice, whether or not such an apparently 'balance' provision is fair depends on a number of factors, and in particular on whether it confers any real benefit on the consumer, comparable to that enjoyed by the supplier. A 'balanced' solution is likely to be acceptable only where there is a roughly equal risk to each party of losing out as a result of the other's cancelling." 4.4, Id.

AND (EMPHASIS ADDED):

 

"A way to improve the fairness of a term is to ensure that it does not go beyond the ordinary legal position. Where cancellation is the fault of the consumer, the business is entitled to hold back from any refund of prepayments what is likely to be reasonably needed to cover his net costs or the net loss of profit resulting directly from the default. There is no entitlement to any sum that could reasonably be saved by, for example, finding another customer."

So, yeah, I basically responded that I don't feel the T&C is unfair, it is unfair under the law. It seems as if I have a case, here.

 

I mean, I don't contest the 10 pound cancellation fee. That seems intended to cover any resulting costs. Their retention of my $400-500 is a completely unbalanced term--that money was calculated for a week's stay in August (and I cancelled in late 2012-early 2013) not some floating right to stay at their hotel. I bargained for that week, not for them to hold on to my money for an Account I never wanted. Meanwhile, I enjoy no benefit.

 

Oh, I paid with a debit card. Which they billed immediately, and spent months getting back to me when I had billing questions!

 

Any suggestions from here?

[BankFodder]

I think that this situation is straightforward. The term of the contract they are relying on is an unenforceable penalty and also is unfair as per UTCCR.

 

However, you will have to sue and that means that you need a UK address for service of documents and you will also need to be in the UK to attend hearings - and there oculd be more than one if they want to play a game with you.

 

Your chances of success are better than 90%.

The chances that they will pay you out to avoid trouble are probably better than 70%

 

I don't think that there is much else to say.

I am astonished at the contractual term and I am astonished that they manage to get away with it.

[NicoTarquinio]

Thanks, Bankfodder, you've been incredibly helpful, especially in directing me to the relevant statutes.

 

I was thinking along the same lines as to how to proceed. Any idea about where I should go if they ignore me again?

[BankFodder]

Ignore you in what respect?

[NicoTarquinio]

Well, easyHotel has no listed e-mail addresses or phone numbers to contact. I got them via e-mail by responding to one of the employees who e-mailed me way back last year after I had waited a few months for a response. They ignored me for two months the last time I sent them something. That sort of thing.

[BankFodder]

They will continue to ignore you unless you send them the court papers.

If you want to proceed then send them a 14 days LBA and then sue.

 

Otherwise, you will have to forget it

[stu007]

EASYHOTEL LIMITED

EASYHOTEL HOUSE

80 OLD STREET

LONDON

UNITED KINGDOM

EC1V 9AZ

Company No. 05018910

[NicoTarquinio]

Bankfodder: that's incredibly helpful, thanks. So far, it looks like they're going to ignore me again, so I will probably have to go after them. My last e-mail asked them to reconsider the e-mail or I would pursue legal action. Fingers crossed that they see reason, though.

 

And stu007: fantastic! I suppose that's where I'll send the mailings if they don't get back to me.

 

Again, thanks to everyone who posted in this thread. I really appreciate you taking time out of your day to help me work through this ridiculous issue and try to get my money back from these thieves.

 

Do any of you have an opinion on chargebacks? I hear it's a process by which the credit card-issuing companies can simply reverse the charge by re-billing a vendor that does not fulfill its side of the bargain. I'm considering talking to my bank about it.

[assisted blonde]

You can get charge backs in the uk not sure about the States though

Edited March 16, 2013 by assisted blonde

[spikeachu]

I issued a chargeback against hotels.com

 

I got the money back for a while, then Hotels.com appealed and lied to the bank to get the money returned to them. The bank then refused to correspond with me further regarding the issue.

 

Personally, I wouldn't bother with Chargeback again, it seems the bank do the bare minimum required, then don't go near it again. It took around 6 months for the whole process and I was no further forward at the end.

 

I ended up issuing court papers to get my money back.

 

I now use a credit card for anything over £100, which gives the bank liability under the consumer credit act and they can't just brush it under the carpet.

 

Obviously, it's your choice. But I'd issue court papers.

 

I don't know exactly how you can go about it, but you can set up a UK PO Box and forward the mail to an overseas address, which might help.

 

Regards, Mike.

[NicoTarquinio]

Mike - that's a great overview of the charegback process in the real world. Thank you so much. I think I'll avoid doing it.

 

Here's an update, though: one of the guys I e-mailed from easyHotel said he'd forward my e-mail to the guy in charge of refunds and finances. Hopefully, he'll give it a look over and consider an exception of their policy. I'll keep posting here if anything comes of it.

 

Again, thanks to everyone for the help!

[ericsbrother]

You made the booking from the US, therefire US law is what counts, The fact that the terms break english law is a bonus to your case. If your card you paid from has a VISA or Mastercard symbol on it you can do a chargeback. Tell your bank to do it, you dont have to raise the matter anywhere else even if the bank says you do, they generally dont know how it works.

[ericsbrother]

I see that Easyhotel.com say that you "buy" a room for a time rather than rent it. I am not sure where this fits in with consumer law, nor where the holding of monies on account stands because you are entitled to reject goods purchased that were not bought face to face and get a refund. the BBB equivalent in the UK is Trading Standards and you contact them as an individual via adviceguide.org.uk

[NicoTarquinio]

That's excellent. Thank you very much for the advice--I will contact them after a few days if easyHotel continues to ignore my last message.

[NicoTarquinio]

An update (although not a particularly good one).

 

After all these months, and many e-mails (some citing the various laws that easyHotel's cancellation policy are fraudulent under), I finally got a response from someone.

 

Dear Nico

 

As you have been informed previously our terms and conditions state your refund goes back into your easy Hotel account and we can not refund he funds back into your personal account.

 

Regards

 

Chas

 

I asked him if he could furnish any reason as to why not, besides the existence of the policy, that aren't unlawful. They do, after all, have a "cancellation fee," which should be all they're entitled to in the first place--I don't dispute it.

 

One of the managers of one of the franchises has made several complaints, and even forwarded my e-mail to the higher-ups. A very nice guy, but I doubt it got me anywhere. He suggested I dispute the payment with my credit card company, which sounds fair to me.

[BankFodder]

I think that I have already indicated that the only thing which will move them is a county court claim. This is still true.

[NicoTarquinio]

I think that I have already indicated that the only thing which will move them is a county court claim. This is still true.

 

Yeah, I think you're right. However, I don't have the funds at the moment to file one--especially because I live in a different country. But I will be doing that soon! In the meantime, I filed a complaint with Citizens Advice to see if they can direct me to any other resources.

[BankFodder]

You still don't get it, do you.

[NicoTarquinio]

You still don't get it, do you.

 

Of course I do. Do you?