Virgin Holidays has committed to paying out £203m in refunds to customers who had their trips cancelled during the pandemic following an investigation by the competition watchdog.
The Competitions and Markets Authority said it had “secured formal commitments” from the company to ensure its customers receive their refunds by Nov 20 at the latest.
If the refunds are not returned within the agreed time frame, the CMA said it was prepared to take the company to court.
The watchdog received hundreds of complaints from people who had not received refunds from Virgin, with some told that they would have to wait as long as four months to get their money back.
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Since March 1, the company has received 53,000 refund requests, the CMA said.
However, Virgin said that 98pc of the requests had already been processed and the 1,300 refunds still outstanding, worth £4.3m, would be processed by the end of Friday.
CMA chief executive Andrea Coscelli said: “People whose holidays have been cancelled due to coronavirus deserve a prompt and full refund. Our action means that Virgin Holidays customers should receive all their money back without further delay.
“We are continuing to investigate package holidays in relation to the coronavirus crisis. Should we find that any business is not complying with consumer protection law, we won’t hesitate to take action.”
Holidays cancelled before Sep 1 will be repaid by Oct 30, the CMA said, while those cancelled between Sep 1 and Oct 31 will be repaid by Nov 20.
To avoid excessive refund delays in the future, Virgin will also ensure that customers entitled to a refund for a cancelled holiday from November onwards will be paid within 14 days.
A Virgin Holidays spokesman said: “We welcome recognition from the CMA that Covid-19 has resulted in extraordinary pressure being placed on package holiday businesses, including Virgin Holidays. We are pleased to confirm that an outstanding 1,300 refunds will be processed by the end of 23 October, as planned and communicated to our customers.
“Since March, the impact of Covid-19 and subsequent global travel restrictions has led to a huge volume of holiday cancellations. The unprecedented volume of refund requests we have received, combined with constraints on our teams and systems during the pandemic, created significant challenges in the processing of refunds.
“We have gradually reduced refund timeframes and are now 98pc through the refund queue, with a remaining 1,300 bookings to be processed on Friday 23 October, in line with our plan to do this by the end of October. At every step of the way we have monitored refunds progress carefully against our commitments and will return Virgin Holidays refunds in the normal timeframe of 14 days in November.”
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