The UK’s Competition and Markets Authority (CMA) asked LoveHolidays to pay out over £18m ($24m) to customers whose holidays were cancelled due to the coronavirus pandemic.
The news comes two weeks after the CMA asked lastminute.com (0QT0.L) to pay out over £7m to customers for the same reason.
The regulator said it decided to investigate the holiday booking website after receiving hundreds of complaints from people awaiting refunds.
Customers who had contacted LoveHolidays were told they would only receive money back for their flights once the firm had received refunds from the respective airlines.
But the CMA explained that under the Package Travel Regulations, online travel agents are legally bound to refund customers for package holidays cancelled due to coronavirus, regardless of whether or not the agent has received money back from suppliers, for example airlines.
Following CMA intervention, LoveHolidays signed formal commitments that ensure these customers receive all their money back.
In total, over £18m will be refunded to 44,000 LoveHolidays customers. Of this, so far £7m has been refunded to 20,000 customers.
The CMA said it has accepted LoveHolidays’ commitment to repay these customers in full by March 2021 at the latest.
“LoveHolidays has been one of the worst culprits when it comes to failing to refund customers for coronavirus cancellations. While it’s right that the regulator has stepped in, customers – who are legally due a refund within 14 days – will be angry that having already waited months the CMA is allowing the online travel agent to delay these refunds for several more months,” said Rory Boland, Editor of Which? Travel.
To ensure that LoveHolidays adheres to its commitments, the CMA said LoveHolidays must provide it with regular reports on the progress of its repayments.
If the firm fails to repay customers by these dates, the CMA said it is prepared to take the company to court.
Andrea Coscelli, CEO of the CMA, said: “Our action today means that LoveHoliday’s customers now have certainty over when they will receive their money back and they will receive this without undue delay.
“We are continuing to investigate package travel firms and where we find evidence that businesses are breaching consumer law, we will not hesitate to take enforcement action to protect consumers,” he added.
The CMA has already 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 (TUI.L), Sykes Cottages and Vacation Rentals, along with lastminute.com.
A study from last month showed that an estimated £1bn in holiday refunds from cancelled travel due to the COVID-19 pandemic are still yet to be paid to consumers.
According to research from consumer watchdog Which?, that is out of an estimated £8bn worth of package holidays that were cancelled since the pandemic swept the globe.
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