LoveHolidays a privately owned travel group, has been ordered by the Competition and Markets Authority (CNA) to hand over £18mln of refunds owed to customers.
The online travel agent has reportedly been telling customers that they would only receive a refund once it has received the money from the airlines.
The CMA said that under Package Travel Regulations, 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, for example airlines.
Now following the intervention by the CMA, LoveHolidays has signed a formal commitment or undertaking to ensure customers get back their money.
In total, over £18mln will be refunded to 44,000 LoveHolidays customers, said the CMA, of which so far £7m has been refunded to 20,000 customers.
The CMA said that having looked LoveHolidays’ financial position it had allowed it to repay these customers in full by March 2021 at the latest.
Insisting on earlier repayment would result in LoveHolidays dipping below its regulatory obligations, said the regulator.
Loveholidays resigned from trade body ABTA earlier this year in a disagreement over who was eligible for refunds.
Tui AG (LON:TUI) and last minute.com have also been subject to undertakings to the CMA to repay refunds owed to customers.