The competition watchdog has said it will take Teletext Holidays to court unless the firm takes “urgent action” over refunds to package holiday customers.
The Competition and Markets Authority (CMA) launched an investigation into the company on February 4 “after receiving hundreds of complaints”.
It said £7.8 million was owed to customers for holidays cancelled due to Covid-19 – but almost £600,000 in refunds remains outstanding.
The CMA warned Teletext Holidays in March and April about legal action. In May 2021, it announced that Truly Holdings Ltd – the company that operates Teletext Holidays, and its sister company, Alpharooms.com – signed undertakings committing to address failures to refund package holiday customers for holidays cancelled during the pandemic.
On Thursday (September 16), the CMA said: “After reviewing Truly Holdings’ final report on progress with repayments, the CMA is concerned that some customers whose package holidays were cancelled since it signed up to the undertakings have not been repaid within the 14 days required by the law.
“Although Truly Holdings has paid back a significant number of customers within this two-week period, too many have been left waiting longer for the refunds due to them.
“The CMA is also concerned that Truly Holdings has not done enough to repay customers who were already owed refunds at the time the undertakings were given.
“As a result of the CMA’s action, Truly Holdings has paid £7.2 million of the £7.8 million owed to package holiday customers, but almost £600,000 in refunds remains outstanding.”
The CMA said Truly Holdings reported that the outstanding amount is owed to customers whose current bank details it does not have and whom it has been unable to refund through their original payment method because the purchases were made more than a year ago.
But the watchdog does not consider that Truly Holdings has done enough to provide refunds to package holiday customers with outstanding claims.
“The CMA has therefore written to notify Truly Holdings that it will take court action unless the firm takes immediate steps to rectify the situation and to ensure that, in the future, customers who are entitled to a refund are repaid in the timeframe specified by law,” said the authority.
Andrea Coscelli, chief executive of the CMA, said: “It is unacceptable that some package holiday customers are still not receiving refunds within the timeframe that they are legally entitled to.
“While we are pleased that many consumers have now received the refunds they were due because of our intervention, we are clear that Truly Holdings must comply with the law.
“Unless it urgently takes steps to address the failures we have identified, we will take court action.”
In response, Teletext issued a statement to “confirm that the company is working as hard as it can to process the remaining refunds”.
It said: “We agreed to use reasonable endeavours to pay £7.79m in refunds to 6,431 customers before 31 August 2021. To date, we have refunded £7.2m to over 5,790 customers. This represents 94% of the amount due a refund under the Package Travel Regulations and over 92% of customers.
“The remaining customers have not been refunded because they have not provided us with their bank details. They have all been contacted repeatedly by email and telephone so that their bank details can be obtained and the refund paid. We have also published a Covid-19 Refunds page on our website with a webform and an email address for customers to contact us. Unfortunately, these customers have not responded to our contact.
“We have engaged in a constructive dialogue with the CMA as to how best to engage with those customers who have, to date, failed to provide us with their bank details.
“We welcome contact from any customers who are due a refund under the Package Travel Regulations but have not received it. We request that they contact us directly from their registered email address (which was used to make their booking) on firstname.lastname@example.org with their booking reference number to enable us to process their refund.”
However, Which? Travel editor Rory Boland said: “We have received countless complaints from Teletext Holidays customers who have been battling for refunds for cancelled holidays. It’s hugely concerning that Teletext has not yet paid all outstanding refunds to its customers and it’s still failing to comply with the 14 day period required by law. We welcome the action taken by the regulator to enforce consumers’ rights.
“Teletext is one of many holiday providers that has attempted to shirk its legal responsibilities to refund customers for cancelled trips, highlighting the need for industry-wide reform.
“The government must ensure there are better protections for holidaymakers’ money, while the Competition and Markets Authority must be given stronger powers to take action against companies which break consumer law – including the ability to impose fines if necessary.”