THE competition regulator has launched court action against Teletext Holidays over delays in refunding customers for trips cancelled due to the coronavirus pandemic.
The Competition and Markets Authority (CMA) said in May Teletext Holidays and sister company Alpharooms formally agreed to address failures to issue timely refunds.
Their parent company, Truly Holdings, signed an undertaking that bound it to process all refunds by the end of August.
Bosses also vowed to ensure that all future refunds for cancelled holidays due to the pandemic are made within 14 days.
CMA said that after reviewing Truly Holdings’s final report on progress with repayments, the CMA wrote to the company on September 16 stating it would take the company to court unless it took urgent action to improve how it handles refunds to package holiday customers.
At that point the CMA said these agreements resulted in Truly Holdings paying £7.2 million of refunds, but payouts worth a total of £600,000 had remained outstanding.
READ MORE: Which? reveal companies to avoid when booking your holiday over Covid policy
Now the CMA says it does not consider that Truly Holdings has done enough to provide refunds to package holiday customers with outstanding claims, including recent cancellations, or to make sure that it pays all future refunds that are due within the 14 days required by law.
It has therefore filed proceedings requesting a court order that outstanding refunds be immediately repaid and that, going forward, customers who are entitled to a refund are repaid within 14 days.
The travel sector has been one of the hardest hit during the pandemic and has faced the most scrutiny from the CMA, which wrote to more than 100 firms reminding them of their responsibility to process all refunds within 14 days by law for any cancellations.
The CMA now says it will also be asking the court to order that Truly Holdings puts in place appropriate processes to ensure it complies with the law in the future.
It said: "As the CMA considers that Truly Holdings is in breach of the law and that harm to consumers is ongoing, it is seeking that the claim be expedited, so tha t the case can be heard more quickly. However, it is for the court to determine a date for the hearing."
The company has said last month that the shortfall is due to not being able to issue refunds through customers’ existing payment method, and not having their current bank details.
But the CMA had said it “does not consider that enough has been done” to return money.
The watchdog also found that “too many” customers whose package holidays had been cancelled since the firms signed up to the undertaking were still not receiving refunds within 14 days.
Andrea Coscelli, chief executive of the CMA, said: “Companies must abide by consumer protection law and treat their customers fairly.
“After engaging with Teletext Holidays extensively, we are now requesting a court order to make sure that the company immediately pays back the money it still owes to customers and refunds people within 14 days, going forward.”
As a result of the CMA’s action to date, Truly Holdings has so far paid over £7 million owed to package holiday customers.
The CMA previously secured agreements from LoveHolidays, Lastminute.com, Virgin Holidays and Tui UK after thousands of customers complained that the companies had failed to refund them for cancelled trips.
A spokeswoman for Teletext Holidays said last month that the firm was “working as hard as it can to process the remaining refunds”.
It has been approached for comment.
CMA said that Truly Holdings Limited agreed to a schedule of repayments, where it would use "all reasonable endeavours" to ensure customers owed cash refunds for package holiday bookings cancelled due to the pandemic on or before 31 July 2020 would be refunded by 30 June 2021; customers with bookings cancelled between 1 August 2020 and 31 October 2020 would be refunded by 31 July 2021; and customers with bookings cancelled between 1 November 2020 and 24 May 2021 (inclusive) would be refunded by 31 August 2021.
It said that an undertaking is a voluntary agreement a firm makes to address an enforcement authority’s concerns and resolve an investigation.
The CMA said its investigation relates to package travel holidays booked with Teletext Holidays and Alpharooms.com, not flights or accommodation booked on a standalone basis.
Where package holidays are cancelled and consumers are entitled to a full refund under the Package Travel Regulations, those refunds must be provided within 14 days of the cancellation.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here