Ask the expert

I had a couple guests stay a few weeks ago for 2 nights and paid a deposit before arriving, which was for the the first nights stay (by credit/debit card) they left without paying for the final night. I have sent them reminders via post to their address but with no reply. I hold card details from which they paid a deposit. Would i be breaking the law by taking what is owed ??

Answered by our Expert: Martin Laver - Tozers LLP

Published: July 2009 

You are entitled to debit a guest's credit or debit card for the amount of the stay where your agreement with them expressly sets this out.  If you do not have booking terms to this effect then you are not legally entitled to take the payment.  It is likely that the credit card company would automatically reverse the transaction upon receiving a complaint from your guest.  They would then require you to prove your booking terms allow you to debt the card.

If you do not have a term allowing you to deduct the payment the next step is to seek to recover the money through the county court.  The matter would be dealt with through the small claims section and you are now able to issue claims online at moneyclaim.gov.uk.  There is a court fee to pay but this is added to the debt if you are successful.  You are also entitled to add interest at the rate of 8% per annum on the sums due.

This problem highlights the importance of not only having Booking Terms & Conditions but also drawing them to the attention of customers.

If tourism businesses would like to discuss this particular issue in more detail please contact Tozers LLP
Tel: 01392 207020