The competition watchdog has been granted extra powers to enforce refunds for people who have been left out of pocket by illegal practices without the need for court.
The CMA welcomed the government granting of its extra powers following a Department for Business, Energy and Industrial Strategy (BEIS) consultation and specifically warned “a number of holiday companies”.
In May, the CMA published an open letter to the package travel sector reminding firms of their legal obligation to ensure refunds options are clear and accessible.
Teletext Holidays has agreed to pay £7 million worth of refunds after an investigation by the CMA, which has held off court action up to now.
Lastminute.com paid back a further £1 million in refunds in February 2021 after the CMA threatened legal action, which took its total refunds past £7 million.
Analysis:CMA warns travel industry to comply with refunds law
At present, the CMA can only issue fines by first bringing court proceedings – or if suitable undertakings are voluntarily provided by the firm.
But BEIS has now granted the CMA the power to determine whether consumer protection law has been broken and to take appropriate action, including fines.
This brings its consumer protection law powers in line with its existing competition powers.
CMA chief executive Andrea Coscelli said: “Firms that refuse to refund their customers – as has been the case with a number of holiday companies during the pandemic – could also face legal orders and hefty fines.
“We look forward to working with the government to progress these recommendations.”