The UK competition watchdog has said it will take legal action against Lastminute.com unless it pays more than £1m in refunds within the next seven days to customers it still owes for holidays cancelled because of the Covid-19 pandemic.
In December, the flight and hotel booking site agreed to pay £7m in refunds by the end of January to more than 9,000 customers whose holidays were cancelled because of coronavirus, following an investigation by the Competition and Markets Authority.
The CMA stepped in after holidaymakers spent months unsuccessfully trying to secure refunds from the online travel agent, many dating back to trips cancelled during the UK lockdown in March and April.
The CMA said on Friday that Lastminute.com still owed more than £1m to 2,600 customers, two weeks after its promised repayment deadline.
In addition, the regulator said that since Lastminute.com made its promise in December, it had continued to flout rules by failing to refund new customers who have had their package holiday cancelled within the required 14-day period.
The company, which is owned and operated by Swiss group Bravofly, has also told some package holiday customers to seek a refund from their airline to get the cost of their flights back. The CMA said this was a breach of obligations under the Package Travel Regulations.
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“It is wholly unacceptable that thousands of Lastminute.com customers are still waiting for full refunds for package holidays despite the commitments the company signed with us,” said Andrea Coscelli, the chief executive of the CMA. “We take breaches of commitments extremely seriously. If Lastminute.com does not comply with the law and pay people their outstanding refunds quickly, we will take the company to court.”
The CMA said Last minute.com had seven days to pay all outstanding refunds or it would begin legal action against the company.
Lastminute.com “sincerely apologised” but also said that Ryanair was partly to blame because the airline had told customers to contact it direct for refunds. Lastminute.com said this has created confusion as it does not know which package holiday customers have asked or received a refund from Ryanair directly.
“Despite all our efforts and commitment we did not meet the CMA’s undertaking’s deadline for [a] small proportion of customers because of the impact of the unforeseen third lockdown and Ryanair disrupting the refund process,” said Andrea Bertoli, managing director at Lastminute.com.
“We sincerely apologise to all customers still waiting for their package holiday refunds and we are making every effort to resolve any remaining delays customers are facing.”
Since the start of the pandemic, the CMA has written to more than 100 package holiday firms to remind them of their obligations to comply with consumer protection law, and has secured refund commitments from Virgin Holidays, TUI UK, Sykes Cottages and Vacation Rentals.