Virgin Holidays commits to issue refunds for Covid-19 cancellations

Virgin Holidays has committed to refund all customers whose package holidays were cancelled due to coronavirus after hundreds of complaints were made over delayed payments.

The Competition and Markets Authority (CMA) investigated the travel firm after being alerted that some consumers were waiting “an unreasonably long time” to get their money back, with some being told it would take 120 days.

Virgin Holidays has received 53,000 refund requests since March 1, totalling £203 million.

The CMA announced on Thursday it has received “formal commitments” that all refunds will be processed “without undue delay”.

Holidays cancelled up to the end of August will be repaid by October 30, while those cancelled last month or this month will be repaid by November 20.

Trips cancelled from next month will be refunded within 14 days, which is the maximum length of time under consumer law.

The CMA warned it is “prepared to take the company to court” if these timescales are not met.

CMA chief executive Andrea Coscelli said: “People whose holidays have been cancelled due to coronavirus deserve a prompt and full refund.

“Our action means that Virgin Holidays customers should receive all their money back without further delay.

“We are continuing to investigate package holidays in relation to the coronavirus crisis. Should we find that any business is not complying with consumer protection law, we won’t hesitate to take action.”

A Virgin Holidays spokesman said the outbreak of Covid-19 had led to “extraordinary pressure” being placed on package holiday businesses.

There were “significant challenges in the processing of refunds” at Virgin Holidays due to an “unprecedented volume” of requests combining with staffing and system constraints, he said.

He added: “We have gradually reduced refund timeframes and are now 98% through the refund queue, with a remaining 1,300 bookings to be processed on Friday 23 October, in line with our plan to do this by the end of October.”

In July, the CMA wrote to more than 100 package holiday firms to remind them of their obligations to comply with consumer law, and received refund commitments from Tui, Sykes Cottages and Vacation Rentals.

Meanwhile, financial protection for consumers who accept a refund credit note (RCN) for cancelled package holidays has been extended.

The Civil Aviation Authority said RCNs issued up to the end of the year will be covered by the Atol scheme, meaning customers will get their money back if the relevant travel firm later collapses.

Atol protection was previously only in place for credit notes issued between March 10 and September 30.

RCNs allow customers to re-book a cancelled holiday or request their money back at a later date.

They have been offered by many travel companies during the pandemic to help their cash flow.