Teletext Holidays to pay £7m in refunds following CMA action
Teletext Holidays will face legal action unless it repays over £7m to customers whose package holidays were cancelled due to the coronavirus (COVID-19) pandemic.
On 4 February, the Competition and Markets Authority (CMA) announced that it was opening an investigation into Teletext Holidays after receiving hundreds of complaints. These showed that people were not receiving refunds they were owed within 14 days, as required by law, for package holidays cancelled by the company due to pandemic restrictions.
The CMA wrote to Truly Holdings Ltd., the company that operates Teletext Holidays and also AlphaRooms.com, in March, setting out in detail its concerns and giving the company an opportunity to address them. The CMA told the firm it could avoid any potential court action by signing formal commitments – known as ‘undertakings’ – to refund affected consumers and ensure compliance with the Package Travel Regulations going forward.
However, Teletext has not agreed to provide undertakings that are sufficient to address the CMA’s concerns.
The CMA has now informed Teletext Holidays that it is preparing to take court action and will launch proceedings if it does not repay the outstanding refunds, or commit to do so, without unnecessary delay.
Andrea Coscelli, Chief Executive of the CMA, said: “There must be no more delays to Teletext refunding customers for holidays they could not take because of the pandemic. It is unacceptable that many have already waited months for the refunds they are legally entitled to. We take very seriously the ongoing failure of Teletext Holidays to meet its obligations. The firm must now comply with the law and commit to refunding its customers. If it does not do so, we will not hesitate to pursue this case in court.”
Teletext Holidays response
Business Leader received the below response from Teletext Holidays following the announcement.
Teletext Holidays have consistently stated our commitment to refund all customers as quickly and practically as possible. We have been in continuous dialogue with the CMA providing evidence of why the refund process has been delayed. We have also provided real time plans on how and when we can refund all customers. Therefore, we are extremely disappointed with today’s CMA announcement that seemingly ignores the reality of the challenges we face through no fault of our own.
The business has already refunded the vast majority of customers and the proposals submitted to CMA detail when we can complete the remaining refunds due.
We at Teletext Holidays understand our responsibilities as a package organiser under the PTRs. The sheer scale of the pandemic and the vast number of holiday cancellations, has unfortunately meant that some of our customers are still awaiting refunds from us. As an online travel agency we book holidays for our customers and money for flights must be paid at the time of the booking. We therefore do not retain significant proportion of the value within our business. Airlines are required to refund consumers within 7 days of a cancellation and travel organisers like Teletext Holidays within 14 days of a cancellation. Since the commencement of the pandemic we have, and are, experiencing very long delays in the collection of refunds for the consumer from airlines.
Whilst still facing long delays from airlines, the company has provided shareholder investment, is still due and waiting a large VAT refund from HMRC and these funds have and will be used to enable the company to repay all customers using its own funds.
We are absolutely committed to repaying all our customers whose holidays were cancelled due to the pandemic, we have committed to refunding all new customers within 14 days of any new booking, and we will continue to work with the CMA to seek support and agreement to complete this process.
We would like to sincerely apologise to our customers for the delay in processing their refunds at this time.