LoveHolidays is being forced to refund 44,000 customers more than £18million for trips cancelled during the pandemic, following an investigation by the competition watchdog.
The Competition and Markets Authority (CMA) said one of the UK’s biggest online travel agents has agreed to give out-of-pocket customers their money back in full by next March at the latest.
The CMA was forced to intervene after receiving hundreds of complaints from customers who were left waiting for refunds after their trips were cancelled during the coronavirus outbreak.
Customers were told they would only be refunded for the flight once LoveHolidays had received the payment from the airline.
But this flouts laws requiring travel agents to refund a customer in full if they have cancelled the holiday, regardless of whether they have received the money back from the supplier.
LoveHolidays was reportedly locked in a dispute with Ryanair over who is responsible for refund delays, with the firm last month insisting the airline was dragging its heels.
The online travel agent has now signed formal commitments that ensure 44,000 affected customers will receive full refunds to a tune of £18million – working out at around £410 each.
So far £7million have refunded to 20,000 customers, but thousands of Britons are yet to receive any money – with some taking to Twitter to vent their frustrations.
Under the agreement, refunds will be made in two tranches for flights and hotel accommodation and transfers, with the ultimate cut-off being March 31.
The CMA said it can take LoveHolidays to court if it fails to repay by the agreed dates.
Andrea Coscelli, chief executive of the CMA, said: ‘Travel agents have a legal responsibility to make prompt refunds to customers whose holidays have been cancelled due to coronavirus.
LoveHolidays is being forced to refund 44,000 customers more than £18million for trips cancelled due to the pandemic, following an investigation by the competition watchdog
The aviation industry has been decimated by the pandemic as global travel bans have been imposed, leading to a huge drop in passenger numbers (Above, Heathrow’s Terminal 5)
LoveHolidays was reportedly locked in a dispute with Ryanair over who is responsible for refund delays, with the firm last month insisting the airline was dragging its heels. The online travel agent has now signed formal commitments that ensure 44,000 affected customers will receive full refunds, with £7million so far refunded to 20,000 customers
The CMA was forced to intervene after receiving hundreds of complaints from LoveHolidays customers who were left waiting for their money back after their trips were cancelled
‘Our action today means that LoveHolidays’ 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.’
In September, LoveHolidays then quit as a member of industry body ABTA, meaning it was no longer obliged to follow a code of conduct put in place to protect consumers during the pandemic.
A spokesman for LoveHolidays said: ‘We sincerely thank our customers for their continued patience, and apologise that it has taken much longer than normal to process their refunds.
‘Whilst we’ve made significant progress, there is clearly more to do, especially on airline refunds, and we urge all parts of the tourism sector to work together to ensure that customers are refunded as quickly as possible.’
But consumer group Which? slammed LoveHolidays as being ‘one of the worst culprits’ for failing to refund customers.
Rory Boland, editor of Which? Travel, said: ‘While it’s right that the regulator has stepped in, customers – who are legally due a refund within 14 days – will be angry that, having already waited months, the CMA is allowing the online travel agent to delay these refunds for several more months.
‘LoveHolidays is one of countless holiday operators that have let customers down on refunds this year, highlighting the need for widespread reforms across the travel industry.’
It marks the latest action taken by the CMA against holiday firms over failed refunds for trips cancelled due to the coronavirus crisis.
The CMA has already secured refund commitments from Lastminute.com, Virgin Holidays, Tui’s UK business, Sykes Cottages and Vacation Rentals.
It has also written to more than 100 package holiday firms to remind them of the consumer protection laws.
Online travel agents are legally bound to refund customers for package holidays cancelled due to coronavirus, regardless of whether or not the agent has received money back from suppliers, such as airlines.
Consumers have struggled to reclaim money they are owed as holidays are ruined by changing travel restrictions amid the pandemic.
The aviation industry has been decimated by coronavirus as international travel bans have been imposed around the globe, leading to an unprecedented drop in passenger numbers.
Millions of UK consumers have struggled to reclaim money they are owed as holidays are ruined by changing travel restrictions amid the pandemic
Customers were told they would only be refunded for the flight portion of their holiday once LoveHolidays had received the payment from the airline
Customers were told they would only be refunded for the flight portion of their holiday once LoveHolidays had received the payment from the airline. But this flouts laws requiring travel agents to refund a customer in full if they have cancelled the holiday, regardless of whether they have received the money back from the supplier
Which? estimated that more than £8billion worth of package holidays are estimated to have been cancelled since the beginning of the pandemic, with just over £1billion still estimated to be outstanding in refunds.
Millions of Britons have had a package holiday cancelled by their provider since the UK went into lockdown in March, with refunds for 21 per cent of holidays where a cash refund was requested still outstanding at the beginning of October.
An estimated total of £1billion is being withheld in partial or full refunds from customers who requested their money back, with the survey suggesting the average cancelled holiday cost £1,784.
Under the Package Travel Regulations 2018, if a package holiday is cancelled by the provider, the customer is legally entitled to a full refund within 14 days.
A package holiday is a booking comprising at least two types of travel or travel-related services made through the same source, most commonly flights and accommodation.
Around 9.4 million people are estimated to have had a package holiday cancelled by their operator since the pandemic hit the UK.
The backlog of refunds for cancellations caused by the coronavirus pandemic meant that the majority of operators struggled to refund within the legal time limit, with customer service lines overwhelmed by travellers trying to contact them to ask about their refunds.
Some package providers reported delays in receiving refunds back from airlines, many of which – despite making commitments to the aviation regulator – continue to break the law on refunds. This has meant package holiday operators have often only been able to process partial refunds for customers.
But while some companies have managed to get on top of the backlog caused by these delays, several other major providers have continued to leave passengers out of pocket, with Which? still receiving huge numbers of complaints from customers waiting for refunds.
The average amount of time spent contacting package holiday companies about cancelled trips was around 15.5 hours.
For more than four in 10 (43 per cent) of the cancelled holidays reported to Which?, customers said they waited longer than a month to get their money back.
During the summer, the CMA launched an investigation into package travel companies’ handling of cancellations and refunds. Following pressure from Which? and the CMA, Tui agreed to refund all customers by September 30.
The regulator also recently confirmed that Virgin Holidays has also committed to processing refunds for all holidays cancelled up to the end of October by November 20.
Nearly four in ten (37 per cent) people who have had a package holiday cancelled by their provider since the beginning of the outbreak said the experience has had a negative impact on their confidence in the travel industry.
***Are you waiting for a refund? Email [email protected]***
Heathrow’s Terminal 4 will NOT reopen next year as airport reveals passenger numbers were 88 per cent down on last year during second lockdown
Heathrow Airport’s Terminal 4 will not reopen until the end of 2021 as it emerged passenger numbers were down 88 per cent in November compared to last year.
Only one million people flew from Britain’s largest airport last month – an 88 per cent drop from the seven million passengers recorded at the same time last year.
The drop in passenger numbers has led to the airport’s decision to keep the fourth terminal closed to travellers.
It comes as Heathrow Airport’s chief executive warned the British economy will not recover from coronavirus until the aviation industry is back on its feet.
Only one million people flew from Heathrow Airport last month – an 88 per cent drop from the seven million passengers recorded at the same time last year
During the UK-wide coronavirus lockdown from March, Heathrow shut Terminal 3 in April and Terminal 4 in May, switching all flights to terminals 2 and 5.
The airport, which is seeking cost-savings and has put an investment project on hold, appealed to the government for more support to protect jobs.
The figures show few people travelled abroad during the most recent national lockdown and also reveal a sharp drop in cargo markets last month.
The London airport’s chief executive, John Holland-Kaye, said the struggling aviation industry was also having a knock on effect on Britain’s economy.
The London airport’s chief executive, John Holland-Kaye, said the struggling aviation industry was also having a knock on effect on Britain’s economy
He warned that until the nation gets flying again, we are holding back trade.
Mr Holland-Kaye told Sky News: ‘We had around one million passengers in November – normally we would have seven million passsengers coming through at this time of the year.
‘This shows not only hows devastaing this has been for aviation but for the UK economy as a while, because aviation provides our long distance trading networks.
‘Yet without those plans flying our goods are not getting to global markets.
‘Until we can get planes flying again we will be holding back the rest of the UJK economy which relies on aviation to get their goods to market.’
Heathrow is the UK biggest trading port with 40 per cent of the UKs exports passing through the hub airport.
Heathrow has seen passenger numbers drop dramatically during the last six months.
Passenger numbers in July during the first national lockdown was reportedly down a staggering 95 per cent year-on-year.
Heathrow is the UK biggest trading port with 40% of the UKs exports passing through the hub airport (pictured stock image)
But there was a last minute dash to airports in early November ahead of a second lockdown coming into effect on the 5th.
Bookings boomed after the Government announced holidays in England and abroad would be banned from November 5 until December 2.
But travellers already on holiday – or who left before the lockdown came into effect – would not have to need to return from their trips early.
It saw passenger queues snaking around the airport as desperate Brits tried to get away before the majority of international travel was once again banned.
But the surge still meant that six million less passengers passed through the airport in the entire month compared to the same period in 2019.
The struggles of the aviation industry has seen mass redundancies.
Pilots, air hostesses, caterers and ground staff are all among those who were put on furlough to ride out the pandemic.
Britain’s major airports Heathrow and Gatwick feared they would have to cut more than a quarter of their workforce to ensure their survival.