Virgin Holidays is committing its customers to pay £203m ($266m). This is for those customers whose package holidays were canceled due to COVID-19. However, there were hundreds of complaints regarding delays in payments.
The Competitions and Markets Authority said it had “secured formal commitments” from the company. But it ensures that the customers receive their refunds by November 20 at the latest.
However, the customers were waiting for an “unreasonably long time” for refunds. The company was telling some customers that it would take 120 days to return their money back.
Whereas, Virgin Holidays received 53,000 refund requests since 1 March. However, the company said it has 1,300 refunds left to process by Friday 23 October, worth £4.2m.
Moreover, the company plans to refund the holidays that it had to cancel that is up to the end of August. and it will pay it by October 30. But the holidays canceled last month or this month will be repaid by November 20.
Meanwhile, Virgin Holiday will refund the trips that are canceled from next month within 14 days. However, this is the maximum length of time under consumer law.
CMA said it was to take the company to court. If they do not refund within the agreed time.
“People whose holidays have been canceled 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,” the chief executive of CMA, Andrea Coscelli said.
It comes at a time when Britain’s travel and hospitality sectors are struggling to survive in the coronavirus crisis. Which saw many package holiday firms and flights amid global lockdowns and quarantine lists.
However, to avoid excessive refund delays in the future. The travel firm will also ensure that customers get a refund for a canceled trip from November onwards and plans to repay within 14 days.
The Company’s Response
A Virgin Holidays spokesperson said, “We welcome recognition from the CMA that COVID-19 has resulted in extraordinary pressure being placed on package holiday businesses, including Virgin Holidays. We are pleased to confirm that an outstanding 1,300 refunds with a value of £4.2m will be processed by the end of 23 October, as planned and communicated to our customers.”
“Since March, the impact of COVID-19 and subsequent global travel restrictions has led to a huge volume of holiday cancelations. The unprecedented volume of refund requests we have received, combined with constraints on our teams. And systems during the pandemic created significant challenges in the processing of refunds.”
“Throughout the crisis, we have sought to make improvements wherever possible. Including increased processing capability and expanded refund teams. 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.”
“At every step of the way we have monitored refunds progress carefully against our commitments and will return Virgin Holiday’s refunds in the normal timeframe of 14 days in November. Our focus now is on rebuilding trust with our customers, recognizing that it has regrettably taken much longer than normal to process their refunds. We thank them sincerely for their patience throughout.”