CMA threatens court action if Virgin Holidays doesn’t refund by agreed dates

The Competition and Markets Authority (CMA) says it won’t hesitate to take Virgin Holidays to court if the operator reneges on agreements to pay outstanding refunds on specified dates.

The CMA has now secured formal commitments from Virgin Holidays – known as ‘undertakings’ – that ensure all customers receive their money without undue delay.

Virgin has agreed that holidays cancelled before 1 September 2020 will be repaid by 30 October 2020 and holidays cancelled from 1 September to 31 October 2020 will be repaid by 20 November 2020.

If Virgin Holidays does not repay customers by these dates, the CMA has said it is prepared to take the company to court.

Virgin Holidays will also ensure that people who are entitled to a refund for a holiday cancelled on or after 1 November 2020 will be paid within 14 days.

The undertakings apply to all Virgin Holidays businesses that offer package holidays, including Virgin Holidays Cruises.

Virgin Holidays has received 53,000 refund requests since the start of March, totalling £203m – a situation which it said had put the company under ‘extraordinary pressure’. The company said it had 1,300 claims left to process, which it said would be done by the end of today.

The CMA said that, to ensure Virgin Holidays adheres to its commitments, the company must provide regular reports on repayment progress.

Andrea Coscelli, Chief Executive at the CMA, said: "People whose holidays have been cancelled due to coronavirus deserve a prompt and full refund.

"Our action means that Virgin Holidays customers should receive all their money back without further delay."

Coscelli added: "We are continuing to investigate package holidays in relation to the coronavirus crisis. Should we find that any business is not complying with consumer protection law, we won’t hesitate to take action."

The CMA has written to over 100 package holiday companies to remind them of their obligations in relation to holiday cancellations and has already secured refund commitments from TUI UK, Sykes Cottages and Vacation Rentals.

Rory Boland, Which? Travel Editor, said: "This is a significant breakthrough for Virgin Holidays customers, who will be relieved that there are now clear expectations about when they will get their money back.

"The regulator is right to intervene to ensure firms comply with the law on refunds, and shouldn’t hesitate to crack down further on any other firms that are still forcing customers to accept refund credit notes or delaying refunds.

"While progress is being made with travel companies, flight refunds are a different matter, as airlines have ignored warnings from the CAA. If trust in the industry is to be restored, consumers need a strong aviation regulator with real powers to hold airlines to account."

By Lisa James, Deputy Editor (UK)

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