The competition watchdog has threatened to take Teletext Holidays to court over delays in refunding customers for trips cancelled due to the coronavirus pandemic.
Andrea Coscelli, chief executive of the Competition and Markets Authority (CMA), said the package holiday firm “must comply with the law”.
In May, Teletext Holidays and sister company Alpharooms formally agreed to address failures to issue timely refunds.
We will take Truly Holdings Ltd to court unless it takes urgent action to improve how it handles refunds to package holiday customers.
As a result of our action, £7.2 million in refunds has been paid to customers but almost £600,000 remains outstanding: https://t.co/at1jgCi3UT pic.twitter.com/p13iLrDlSH
— Competition & Markets Authority (@CMAgovUK) September 16, 2021
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.
On Thursday, the CMA said these agreements resulted in Truly Holdings paying £7.2 million of refunds, but payouts worth a total of £600,000 remain outstanding.
The company said 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 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 are still not receiving refunds within 14 days.
It is unacceptable that some package holiday customers are still not receiving refunds within the timeframe that they are legally entitled to
Andrea Coscelli, CMA
Mr Coscelli said: “It is unacceptable that some package holiday customers are still not receiving refunds within the timeframe that they are legally entitled to.
“While we are pleased that many consumers have now received the refunds they were due because of our intervention, we are clear that Truly Holdings must comply with the law.
“Unless it urgently takes steps to address the failures we have identified, we will take court action.
“Although the CMA does not currently have powers to impose fines for this, this is the kind of issue that could be resolved at pace and met with fines if the CMA receives the consumer powers that the Government is currently consulting on.”
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.
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.
A spokeswoman for Teletext Holidays said the firm is “working as hard as it can to process the remaining refunds”.
“We have engaged in a constructive dialogue with the CMA as to how best to engage with those customers who have, to date, failed to provide us with their bank details,” she said.
“We will vigorously pursue any strategy agreed with the CMA.
“We would like to assure our customers that, once the necessary details are received, the refunds will be paid.”