The Competition and Markets Authority (CMA) has sent a letter before action to Lastminute.com over its failure to refund over £1m to customers whose package holidays were cancelled due to the pandemic.
Lastminute.com signed undertakings in November 2020 regarding the repayment of £7m owed to more than 9,000 customers.
It committed to repay at least half of customers by 16 December 2020 and to pay remaining refunds by no later than 31 January 2021. However, 2,600 customers are still waiting for refunds worth over £1m.
Under the package travel regulations, any customer entitled to a refund following cancellation of a package holiday must receive those refunds within 14 days of the cancellation. Lastminute.com has also failed to meet this commitment.
The company also advised customers to seek a refund for flights from their airline in a further breach of the regulations.
Melissa Worth, a dispute resolution partner at Horwich Farrelly, said “Consumers are well protected by law, as has been demonstrated by the CMA’s intervention.
“It is unclear what reasons, if any, Lastminute.com has given for the continued delay, but as the business has clearly exceeded the repayment window required by law, it will be very interesting to see what defence they submit in response to the action.”
The CMA has been clear in its commitment to take further action. CMA chief executive Andrea Coscelli said: “We take breaches of commitments extremely seriously. If Lastminute.com does not comply with the law and pay people their outstanding refunds quickly, we will take the company to court.”
The courts take a dim view of businesses failing to resolve disputes outside of court without good reason. The CMA has given Lastminute.com a further 7 days to pay to avoid court.
It must also ensure that any customers legally entitled to a refund for package holidays cancelled from this point onwards, receive a full refund within 14 days.