More than 40,000 customers of LoveHolidays will receive long-awaited refunds totalling more than £18 million for trips cancelled due to the pandemic after an investigation by the competition watchdog.
The Competition and Markets Authority (CMA) said LoveHolidays has agreed to give out-of-pocket customers their money back in full by next March at the latest.
The CMA was forced to intervene after receiving hundreds of complaints from LoveHolidays customers who were left waiting for their money back.
When customers contacted LoveHolidays to request a refund for a cancelled holiday, they were told they would only get their money back for their flights once the firm had received refunds from airlines, according to the CMA.
LoveHolidays was reportedly locked in a dispute with Ryanair over who is responsible for refund delays, with the firm last month insisting the airline was dragging its heels.
LoveHolidays has now signed formal commitments that ensure 44,000 affected customers will receive full refunds, with £7 million so far refunded to 20,000 customers.
Under the agreement, refunds will be made in two tranches for flights and hotel accommodation and transfers, with the ultimate cut-off being March 31.
The CMA said it can take LoveHolidays to court if it fails to repay by the agreed dates.
Andrea Coscelli, chief executive of the CMA, said: “Travel agents have a legal responsibility to make prompt refunds to customers whose holidays have been cancelled due to coronavirus.
“Our action today means that LoveHolidays’ 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.”
🏖️ Following our action, LoveHolidays has committed to pay customers over £18 million in refunds, after their holidays were cancelled due to #COVID-19.
44,000 customers will now be refunded in full by 31 March 2021.
— Competition & Markets Authority (@CMAgovUK) December 15, 2020
It marks the latest action taken by the CMA against holiday firms over failed refunds for trips cancelled due to the coronavirus crisis.
The CMA has already secured refund commitments from Lastminute.com, Virgin Holidays, Tui’s UK business, Sykes Cottages and Vacation Rentals.
It has also written to more than 100 package holiday firms to remind them of the consumer protection laws.
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, such as airlines.