PACKAGE holiday firms must offer immediate refunds to customers whose trips have been cancelled due to Covid or face legal action, a watchdog has warned.

The Competition and Markets Authority has received more than 17,500 complaints about the difficulty in obtaining refunds or information.

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The CMA has written to more than 100 companies reminding them of their obligations under consumer law to grant full-cash refunds “promptly and without undue delay”.

Customers with hols cancelled by Covid should get their money refunded within 14 days. But it can take weeks for requests to be processed.

Deposits are sometimes lost and cancellation fees charged when they shouldn’t be, the CMA says.

In an open letter to unnamed firms released yesterday, the watchdog says it recognises that while the pandemic has created “extraordinary pressures on package holiday businesses . . . it is nonetheless important that businesses comply with consumer law”.


 

The CMA’s George Lusty said: “This warning should act as a clear reminder that, even as lockdown eases, the CMA will work to protect consumers from unfair businesses practices.

“We’re already looking at package holidays as part of our investigation into companies’ cancellation policies, and we’ll continue to take direct action wherever we can.”

In March, the watchdog established its Covid-19 taskforce to identify practices that were harming consumers.

Since then holiday lets firm Sykes Cottages reversed its policy on cancelled bookings and agreed to offer cash refunds instead of only re-bookings, vouchers or partial refunds.

Which? recently found that companies including Tui, Love Holidays, Virgin Holidays and Ryanair had been issuing credit notes for cancelled bookings even when customers have asked for a cash refund.

Customers of other providers, such as lastminute.com, reported that it was almost impossible to contact them.

Tui has since introduced an online form to allow a refund.

Which? said not all were ignoring obligations — Trailfinders and Kuoni have been offering cash refunds within 14 days of cancellation.

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