The owners of Teletext Holidays are facing legal action from the Competition and Markets Authority (CMA) for failure to lawfully process customer refunds.
As the competition regulator, the CMA is alleging that Truly Holdings, Teletext Holidays’ parent company, is acting illegally by making customers wait for payouts on refunds.
This is the first time the CMA has taken legal action of this kind against a travel company in relation to its refund policy for customers who were not legally allowed to travel due to pandemic restrictions.
It follows months of intervention by the CMA into Truly Holdings’ processing of COVID-related refunds and failure to comply with consumer laws on package holiday refunds.
In May 2021, the company agreed in writing to take all reasonable measures to refund customers whose package breaks were cancelled during the pandemic by the end of August and to meet existing package holiday rules by refunding new customers within 14 days of breaks being cancelled.
According to the CMA, many customers were still waiting to be refunded in September and the company was also allegedly failing to refund new customers whose holidays had been cancelled.
As the CMA does not have powers to fine companies for breaching consumer regulations, the agency threatened legal action if Truly Holdings did not resolve the issues in compliance with consumer laws.
The CMA confirmed on 18 October 2021 that it has started legal proceedings and is seeking a court order to compel the travel company to repay customers still waiting to be given their money back.
This action follows a statement by the CMA earlier this month that it was closing an investigation into Ryanair and British Airways in respect of their COVID-19 refund policies, citing a lack of clarity in the law to support legal action on behalf of consumers.