Virgin Holidays refunds £203million to avoid court trial

Khanh Ngo explores the news of Virgin Airlines' recent scandal involving refunds to passengers.

Khanh Ngo
2nd November 2020
Virgin Holidays has committed to issuing imminent refunds to customers with cancelled packaged holidays following the coronavirus crisis after the regulator intervened.

The Competition and Markets Authority (CMA) has been investigating the firm after receiving hundreds of complaints from customers whose packaged holidays were cancelled by the pandemic.

Under consumer law, packaged holidays cancelled by the operator should be refunded within 14 days, but some customers have had to wait three months to get their money back.

Andrea Coscelli, Chief Executive at the CMA, 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 packaged holidays in relation to the coronavirus crisis.”

The CMA has now secured “formal commitments” from Virgin Holidays which set refund deadlines on October 30, 2020 for cancellations before September 1, and on November 20, 2020 for cancellations up till October 31.

If these deadlines are not met, the CMA said it is prepared to take the company to court.

Since March 1, 2020, Virgin Holidays has received 53,000 refund requests, 98% of which is said to have been processed, leaving 1,300 refunds to be issued on October 23 at a value of £4.2million, ahead of the first deadline.

A Virgin Holidays spokesperson said: “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.

“Our focus now is on rebuilding trust with our customers, recognising that it has regrettably taken much longer than normal to process their refunds.

“We thank them sincerely for their patience throughout.”

Since the beginning of this pandemic, the CMA has received thousands of complaints about the difficulty in obtaining refunds from holiday firms.

The regulator has written to more than 100 packaged holiday providers reminding them of their legal obligation to grant full-cash refunds “promptly and without any undue delay”.

In mid-September, Tui promised to refund customers by the end of the month, following action by the CMA.

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