LoveHolidays forced to refund £18m for cancelled holidays after hundreds of complaints

LoveHolidays has pledged to refund customers more than £18m for cancelled holidays after an investigation by the Competition and Markets Authority (CMA).

The CMA received hundreds of complaints from consumers who were left out of pocket when the online travel agent cancelled their trips due to the coronavirus pandemic but failed to give them their money back in full.

Customers were told they would only be refunded for the flight portion of their holiday once LoveHolidays had received the payment from the airline.

However, this contravenes the Package Travel Regulations, which stipulate that travel agents and tour operators must refund a customer in full if they have cancelled the holiday, regardless of whether they have received the money back from the supplier.

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The regulations also state that customers must be refunded within 14 days of the cancellation, a timeframe that the majority of travel companies have found nigh-on impossible to stick to during the pandemic. 

After the CMA’s intervention, LoveHolidays has now signed formal commitments – known as undertakings – promising to pay back all its customers.

So far, £7m in refunds has been paid out to around 20,000 customers. The firm has committed to paying the remaining £11m to 24,000 customers by March 2021 at the latest.

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Insisting on earlier repayment would result in LoveHolidays dipping below its regulatory obligations, according to the CMA.

The refund process is to be speeded up by being split into two parts, with the cost of hotel accommodation and transfers for holidays cancelled before 1 November refunded by 31 December, and the cost of flights refunded by either the end of February or the end of March.

The CMA has demanded regular reports from the company, and has said it is prepared to take LoveHolidays to court if the agreed payment deadlines aren’t met.

“Travel agents have a legal responsibility to make prompt refunds to customers whose holidays have been cancelled due to coronavirus,” said Andrea Coscelli, chief executive of the CMA.

“Our action today means that LoveHoliday’s 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.”

The CMA has previously intervened to ensure that Lastminute.com, Virgin Holidays, TUI UK, Sykes Cottages and Vacation Rentals all met their refund obligations.

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