Fahd Izbal booked tickets for his train journey from Bridge of Allan, Stirling, to London King’s Cross three months in advance to be on the safe side. On the day, he was at the station early for the first leg of the trip, the 06.01 ScotRail service to Edinburgh. The train never arrived, nor was there any mention of it on the departure board. ScotRail told him that the service had never existed on the timetable and referred him to Virgin East Coast, which had sold him the through ticket. Virgin admitted there was no such train.

Izbal was forced to take a later train, for which his ticket was not valid, and explain himself to the guard. He missed his connection to London and arrived 61 minutes late.

He wrote to Virgin in May requesting compensation but received no response. “Their communication on the day was woeful. I had to keep chasing to find out how I would get to my destination on an invalid ticket without being kicked off a train,” he says. “I’d reserved a seat in a quiet carriage for the Edinburgh-to-London leg, but because I’d missed the connection I had to squeeze in to a loud and crowded carriage.”

Virgin never did pay up. Its franchise was removed last month due to its poor performance and the government-owned London North Eastern Railway (LNER) took over the service. After the Observer intervened, LNER agreed to refund the ticket price and offer a first-class ticket to any destination as goodwill.

Izbal’s ordeal highlights the challenges faced by passengers when seeking compensation for disrupted rail journeys. Commuters in the north caught up in last month’s timetable chaos were reportedly refused the payouts they were entitled to because they submitted too many claims for repeatedly delayed journeys.

The government has announced that season ticket holders on the worst-affected lines will be refunded up to a month’s worth of travel on top of the usual compensation. Regular travellers with ordinary tickets will miss out on the extra bounty, and there’s no guarantee that they’ll benefit from standard dues, either. Only a third of travellers claim the compensation they are entitled to when their journeys are delayed. The remainder are either put off by the complexity of the system, or are unaware that it even exists.

Facebook Twitter Pinterest Fahd Izbal booked a trip from Scotland to London but was sold a ticket for a train that didn’t exist. Photograph: Katherine Anne Rose/The Observer

While the airline industry is governed by an EU-wide law that sets statutory compensation levels for delays and cancellations, train operators set their own payouts, and policies vary widely. The result is that passengers may have no idea when and how much they could claim unless they study the terms and conditions of the operator they are travelling with.

A commuter travelling from London to York on an LNER service, for instance, would be entitled to a 50% refund of a single ticket if the train arrived 30 minutes late. If the operator was Grand Central they’d get nothing at all. For an hour’s delay, LNER would refund the entire fare for the affected journey, whereas Grand Central only repays the full sum if a train arrives more than three hours late.

Last month, a private member’s bill was submitted calling for faster and more generous compensation to be paid automatically when services are disrupted. Bim Afolami, MP for Hitchin and Harpenden, has won cross-party support for his demands, which include automatic payouts within five days. Currently, constituents who have been prevented from getting to work on time have been forced to wait up to 28 days for compensation as low as £2.

Passengers lost 3.6m hours due to significant delays in 2016-17, according to research by the consumer group Which?, but 40% of commuters and 54% of leisure passengers were not told of their rights to claim compensation. “The approach has been absolutely woeful,” says Alex Hayman, managing director of public markets at Which?. “If train companies can’t simplify unnecessarily complex claims systems for delayed customers, then government must press for automatic compensation to be introduced across the industry so people can get the money they are owed.”

While passengers suffer disrupted work schedules and lost business, the train operators rake in millions from their misery. Every time something goes wrong with the infrastructure, Network Rail compensates them for the impact of the delays. Companies received more than £2bn for cancellations and delays caused by bad weather, engineering work and other disruption between 2011 and 2017, but over the same period, passengers were given just £187m in compensation.

Moreover, a minute’s delay to a service triggers an automatic payment to rail companies, while passengers have to be delayed by half an hour and fill out a two-page form before they qualify for a rebate that can take up to four weeks to arrive.

Passengers’ rights when things go wrong have been improving, but since train companies are reluctant to broadcast the fact, you’d have to plough through the passengers’ charter of each operating company to know exactly how. In 2016 the rules were changed to allow travellers to claim a refund for delays rather than a voucher, and the National Rail Conditions of Travel, which set the minimum standards rail operators must abide by, require operators to refund half the cost of a journey if it’s delayed by more than an hour and the fault lies with the operator. That includes any problems with the infrastructure, such as signals failure and leaves on the line.

Most companies now go above and beyond that with the voluntary Delay Repay scheme, under which payouts kick in for delays of 30 minutes or more, regardless of whether the company was to blame. However, each company has different policies depending on the length of the journey and the type of ticket. The system is different in Northern Ireland, where the national Conditions of Carriage don’t apply, and Delay Repay only awards compensation in the form of vouchers.

From this year, some operators are paying out for delays of 15 minutes and one – c2c – gives automatic rebates to smartcard holders if a train is two minutes late.

Facebook Twitter Pinterest While passengers suffer disrupted work schedules and lost business, the train operators rake in millions. Photograph: Will Oliver/EPA

However, season ticket holders with companies who do not offer Delay Repay can’t claim for individual journeys. Instead, they must hold out for a discount reflecting overall poor performance throughout the year when they renew.

Even less known is the quiet shift in the rules which permits passengers to claim for consequential loss if a disrupted journey requires them to take a taxi or buy a meal.

Previously, the Conditions of Carriage absolved rail companies from all liability if their customers were left out of pocket, but after a campaign by Which?, the Consumer Rights Act can now be applied to train journeys, holding companies to account if they don’t fulfil their obligations with “reasonable care and skill”. Potentially that could mean travellers claiming redress if they are denied the seat they reserved, or if the onboard facilities are out of order, as well as for minor delays that cause knock-on challenges.

Whether they’ll get what they want is another matter. Operators are still “thumbing their noses” at passengers, according to Which?. It has found that nearly half are wrongly telling passengers that they can’t claim for reasonable expenses when their train doesn’t run, and the majority don’t inform them of their statutory rights on their websites.

“This is the latest in a catalogue of examples of train companies treating their passengers with breathtaking disregard,” says Hayman. “They have been warned time and again about their duties to ensure their passengers are getting the money they are owed when they fail to deliver, yet they fail to act until forced. The regulator must start showing some teeth and take immediate enforcement action, or the government has no choice but to step in and stand up for passengers and their rights.”

Passengers who hit the buffers when trying to recoup their losses currently have limited opportunity for redress. The industry watchdogs Transport Focus and London TravelWatch will take up unresolved complaints, but they have no powers to enforce decisions. This spring the regulator, the Office of Rail and Road (ORR), announced plans to set up an ombudsman scheme with full legal powers, and to require all train operating companies to sign up. However, it won’t come into operation until the end of the year – too late for the multitudes caught up in the timetabling fiasco.

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The Campaign for Better Transport is calling on the government to reform the system and oversee a faster rollout of smartcards which, unlike paper tickets, can be refunded automatically.

“We’d like incremental compensation for delays longer than two minutes to be made best practice,” says the campaign’s chief executive, Stephen Joseph. “Currently a train is judged to be on time if it arrives within five minutes of the timetable – or 10 minutes if it’s a long-distance service. A two-minute threshold would encourage rail companies to measure their punctuality more minutely.”

How to claim compensation for cancellation or delay

• Keep hold of your tickets and the receipt in case they are swallowed by the ticket barrier. You’ll need to scan or post them to make a claim.

• Look up the passenger charter for the train company running the service to find out how, what and when you can claim. An online search for the company name and ‘compensation’ should take you straight to the relevant information.

• You can find out the exact length of the delay at www.recenttraintimes.co.uk, which records the arrival times of all services over the last three months. Fill in the company’s claim form online, or request one from the station or by phone.

• You have to apply within 28 days to qualify.

• If your claim is rejected, write a formal complaint to the train company citing the terms of its charter. You can find a complaints tool at www.resolver.co.uk. If that fails, you can take your case to Transport Focus or, if the journey was within London, to London TravelWatch.