More than £1bn in holiday refunds still being illegally withheld, claims Which?

More than £1bn in package holiday refunds is still being illegally withheld by tour operators and travel agents, according to new research by Which?

The consumer champion surveyed 7,572 people who had a package holiday cancelled by their holiday provider during the coronavirus pandemic, with many of them reporting negative experiences.

Which? estimates that, of the approximated £8bn-worth of package holidays that have been cancelled since the beginning of the coronavirus outbreak, just over £1bn in refunds are still outstanding.

And reimbursement for one in five (21 per cent) holidays where a cash refund was requested was still outstanding at the beginning of October, according to Which?’s research.

Nearly four in 10 (37 per cent) people surveyed said the experience of claiming a refund for a cancelled holiday during the pandemic had had a negative impact on their confidence in the travel industry.

Some 43 per cent said they had waited more than a month to get their money back, while the average amount of time respondents spent contacting package holiday companies about cancelled trips was around 15.5 hours.  

According to the Package Travel Regulations, companies have an obligation to refund customers in full within two weeks of cancelling their holiday.

However, the unprecedented travel restrictions and subsequent cancellations caused by coronavirus meant plenty of tour operators and travel agents struggled to process refund requests within the legal time limit.

While some brands have managed to work their way through the backlog, others are still behind in issuing cash refunds to thwarted holidaymakers.

The Competition and Markets Authority (CMA) previously launched an investigation into package travel companies’ handling of cancellations and refunds, which led to Tui agreeing to refund all customers by the 30 September.  

Virgin Holidays has also committed to processing refunds for all holidays cancelled up to the end of October by 20 November following pressure from the CMA.

Rory Boland, editor of Which? Travel, said: “Since Which? first highlighted the issue of holiday companies delaying or denying refunds for holidays cancelled due to coronavirus, some operators have continued to flout the law and the sums of money being illegally withheld from holidaymakers are staggering.

“It’s simply unacceptable that some of the UK’s largest operators are still getting away with breaking the law, but without meaningful intervention from the government and the regulators in this space, many people will struggle to get their money back.  

“The CMA must take firm action against any operators that are continuing to drag their feet on refunding holidaymakers, and the government must urgently set out how it will support travel companies in fulfilling their legal obligations to passengers.”