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Even with federal help, some struggling businesses still withholding refunds

The travel industry, particularly charter tours, remains among the hardest hit by the COVID-19 pandemic. As a result, some customers are still waiting on refunds.

GASTONIA, N.C. — Despite receiving federal loans, some businesses still aren't settling up with customers almost a year after Coronavirus canceled their plans.

Long before travelers even started thinking about COVID-19, people like Crystal Huntley signed contracts and paid deposits for trips the pandemic ultimately forced them to scrap.

The Gastonia woman has spent the last decade planning trips, including several through different companies for 2020. Huntley said only one company hasn't refunded her money.

"Case after case, nobody had trouble getting their money back," she said. "It's taken too long."

Huntley reached out to WCNC Charlotte, hoping we could help recover the $1,200 she paid for a charter bus trip to Pigeon Forge and Gatlinburg. She said dozens of people paid her deposits upfront to go on the day trip.

"The people are calling me about refunds. I'm like, 'Just be patient,'" she said.

Emails show she requested a refund from Broach Coach Charters in April 2020.

When the pandemic hit, tour companies laid off drivers and reduced the hours of the office staff as their business screeched to a halt.

Broach Coach Tours said the company hasn't refunded money to any customers at this point, following nine months of no business. The company is banking on the industry picking back up and as some trips start to trickle in, the company assures us it intends to eventually pay Huntley her full refund.

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A review of federal Paycheck Protection Program records shows Broach Tours received an $80,000 PPP loan in May. The federal government will forgive that loan as long as most of it is spent on payroll and the rest on other specific business expenses.

Attorney Matt Villmer specializes in business law. He said some businesses are struggling to spend their PPP money to pay employees since they can't really even operate.

"I think a lot of industries are in a tough spot now," Villmer said.

Villmer said that leaves the door open for them to use their loans for other business-related expenses, like refunds, as long as they know full well they'll have to pay back portions of the loan.

"If a company gets PPP money and they can't otherwise spend it in the categories that they need to, because of the shutdown or anything else, they can certainly use that PPP money to refund customers if they wanted to, but the caveat is if they use the money for that, then it's not going to be subject for forgiveness," he said. "You're stuck at 1% interest over a 5-year term, which really isn't that bad as far as loans are concerned."

Villmer said the law doesn't forbid businesses from using the money for other types of business expenses.

"If you're using your money in good faith for business expenses, even if it's not in the buckets that the (Small Business Administration) mandates for forgiveness, I think you'd be hard-pressed to find after an IRS or SBA audit that they're going to come down on you hard if you use that money on business expenses or to keep your business afloat," Villmer said.

RELATED: Nonprofits encouraged to apply for TEGNA Foundation grant

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