Online travel and leisure retailer lastminute.com (0QT0.L) has agreed to pay out over £7m ($9.4m) to customers who have been waiting for refunds for package holidays cancelled due to the coronavirus pandemic, following action from the government.
The Competition and Markets Authority (CMA) said it investigated the company after receiving hundreds of complaints that people were not receiving refunds.
More than 9,000 customers whose holidays were cancelled by lastminute.com are currently awaiting refunds, the CMA said in a statement.
Many of these will have had to wait more than 14 days, exceeding the repayment window required by law, the statement added.
Following CMA intervention, Lastminute.com has signed formal commitments to pay these refunds as soon as possible.
Lastminute.com will repay at least half of customers by 16 December and pay the remaining refunds by no later than 31 January next year. It has committed to these dates as the earliest by which it can pay, the CMA said.
The commitments secured by the CMA will also mean that anyone entitled to a refund for a holiday cancelled by Lastminute.com on or after 3 December 2020 will be paid within 14 days.
“To ensure that lastminute.com adheres to its commitments, the company must provide the CMA with regular reports on the progress of its refunds,” the regulator said.
Andrea Coscelli, chief executive of the CMA, explained that “online travel agents have a legal responsibility to provide prompt refunds to customers whose holidays have been cancelled due to coronavirus – irrespective of whether the agent received refunds from airlines and accommodation providers.”
He said that the CMA is continuing to investigate package holiday firms. “If we find that businesses are breaching consumer protection law, we will not hesitate to take further action,” he added.
The CMA said it had taken “significant action” in relation to holiday cancellations. It has written to over 100 package holiday firms to remind them of their obligations to comply with consumer protection law, and has already secured refund commitments from Virgin Holidays, TUI UK, Sykes Cottages and Vacation Rentals.
Meanwhile, UK consumers have faced a torrent of problems using holiday booking sites during the coronavirus pandemic, according to consumer group Which?
Which? highlighted issues with flight booking sites saying some companies proved “impossible to contact regarding cancellations and refunds during the UK’s lockdown.”
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