Court action has been launched against Teletext Holidays over delays in refunding consumers for trips cancelled due to the coronavirus pandemic, the competition watchdog has announced.
The Competition and Markets Authority (CMA) said it has requested a court order stating that package holiday customers with outstanding refunds are repaid immediately, and those entitled to a refund in future are paid within the 14 days required by law.
Truly Holidays, the company that operates Teletext Holidays and sister company Alpharooms.com, formally agreed in May to address failures to issue timely refunds.
But the CMA does not believe the firm has done enough to deal with the problem.
CMA chief executive Andrea Coscelli said: “Companies must abide by consumer protection law and treat their customers fairly.
“After engaging with Teletext Holidays extensively, we are now requesting a court order to make sure that the company immediately pays back the money it still owes to customers and refunds people within 14 days going forward.”
The CMA said that its actions to date have resulted in Truly Holidays paying more than £7 million owed to package holiday customers.
A spokeswoman for Teletext Holidays said: “The company is working as hard as it can and continues to process the remaining refunds due under the Package Travel Regulations to our remaining customers, and as such is very disappointed by the latest action by the CMA.
“As at 11th October 2021, we owe £1.2 million towards historic and ongoing cancellations and have refunded over £10.8 million.
“We have engaged in constructive dialogue with the CMA and continue to vigorously pursue any strategy agreed with the CMA.”
Rory Boland, editor of Which? Travel magazine, said: “It’s unacceptable that Teletext Holidays has not yet paid all outstanding refunds for cancelled holidays and is still failing to comply with the 14-day period required by law, so the Competition and Markets Authority is right to start court action.
“Teletext is just one of many holiday providers that have attempted to shirk their legal responsibilities to refund customers for cancelled trips, highlighting the need for industry-wide reform.
“The Government must ensure there are better protections for holidaymakers’ money, while the Civil Aviation Authority and Competition and Markets Authority must be given stronger powers to take action against companies that break consumer law – including the ability to impose fines if necessary.”
Agreements from LoveHolidays, Lastminute.com, Virgin Holidays and Tui UK were previously secured by the CMA 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 watchdog, which wrote to more than 100 firms reminding them of their responsibility to process all refunds within 14 days by law for any cancellations.