Last week, Which? submitted evidence to the Competition and Markets Authority (CMA) detailing how Lastminute.com had broken its promise to refund customers whose package holidays had been cancelled. The CMA has now told Lastminute.com to pay up in seven days or it will take the company to court.
After months of stalling customers over holiday refunds, Lastminute.com was investigated by the CMA in December. It committed to pay £7m in outstanding package holiday refunds for trips cancelled on or before 2 December by the end of January 2021. It also agreed to pay refunds for packages cancelled after that date within 14 days.
However, the CMA today confirmed the company has not met either obligation and still owes £1m in refunds to 2,600 customers.
The CMA has now sent a letter before action to Lastminute.com. To avoid court action, the online travel agent (OTA) has one week to repay outstanding refunds and to ensure it meets its 14-day commitment to refund all package holiday customers where they are entitled to it from now on.
Lastminute.com asks customers to claim money from airline directly
Which? found in its recent research that Lastminute.com was asking some package holiday customers who were waiting on refunds to claim the flight portion from airlines directly.
The CMA had told Lastminute.com to stop doing this, and fulfill its responsibilities under Package Travel and Linked Travel Arrangements Regulations 2018. By law, the OTA is obliged to return funds directly to consumers with cancelled package holidays within 14 days.
Legal action threatened
Andrea Coscelli, Chief Executive of the CMA 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’.
Rory Boland, Editor of Which? Travel, said: ‘Lastminute.com has been one of the worst culprits when it comes to failing to refund customers for coronavirus cancellations, so it is right the regulator has taken strong action against the operator, sending a clear message that this kind of behaviour is unacceptable.
‘Lastminute.com 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.
‘The government must look at measures to ensure there are better protections for holidaymakers’ money, while the Civil Aviation Authority – which has been unable to take meaningful action against airlines holding up the refund process by withholding money from holiday companies – must be given stronger powers.’