Lastminute.com has promised to repay a total of £7 million to more than 9,000 customers who it failed to refund for cancelled holidays, a consumer watchdog has announced.
The Competition and Markets Authority (CMA) said the company has agreed to repay at least half the customers by December 16, and the rest no later than January 31.
Anyone entitled to a refund for cancellations on or after Thursday will be paid within 14 days, the CMA added.
The watchdog received hundreds of complaints that lastminute.com was not issuing refunds for trips cancelled due to the coronavirus pandemic.
It is continuing to investigate package holiday firms following concerns that refunds across the sector are being delayed.
CMA chief executive Andrea Coscelli said: “Online travel agents have a legal responsibility to provide prompt refunds to customers whose holidays have been cancelled due to coronavirus – irrespective of whether the agent received refunds from airlines and accommodation providers.
“Our action today means that customers whose holidays were cancelled by lastminute.com will receive their money back without undue delay.
“The CMA is continuing to investigate package holiday firms following concerns that people are not getting the refunds they’re entitled to when bookings can’t go ahead because of the pandemic.
“If we find that businesses are breaching consumer protection law, we will not hesitate to take further action.”
In October, the CMA secured a commitment from Virgin Holidays that it will refund all customers “without undue delay” after hundreds of complaints were made over delayed payments.
The watchdog also wrote to more than 100 package holiday firms in July to remind them of their obligations to comply with consumer law, and received refund commitments from Tui, Sykes Cottages and Vacation Rentals.
Package holiday customers are legally entitled to refunds within 14 days for cancelled trips.
But many people have been left waiting months for a pay-out during the pandemic as travel firms face a cashflow crisis.
A spokeswoman for lastminute.com said: “Since March we made refunding customers our number one priority and we’re pleased to reiterate this commitment with the CMA.
“We engaged constructively with the CMA and while we have already refunded more than 200 million euros (£180 million) worth of bookings overall, it is the group’s commitment to work through those that remain to be paid.”
Rory Boland, editor of consumer magazine Which? Travel, commented: “Online travel agents have fared particularly poorly when it comes to processing refunds for coronavirus cancellations and lastminute.com has been one of the worst, so it’s right that the regulator has intervened to secure this commitment from the company.
“Lastminute.com is just one of countless holiday operators that have let customers down on refunds this year, highlighting the need for widespread reforms across the travel industry.
“The Government must look at measures to ensure there are better protections for holidaymakers’ money, while the Civil Aviation Authority – which has been unable to take meaningful action against airlines withholding money from holiday operators, and in turn delaying refunds – must be given stronger powers.”