Lastminute.com has blamed the third UK lockdown and Ryanair’s policy of refunding OTA customer directly for ongoing problems in dealing with a backlog of claims.
The European OTA will face legal action unless it repays more than £1 million to customers it pledged to refund after their package holidays were cancelled.
On December 1, the Competition and Markets Authority (CMA) announced that Lastminute.com had signed formal undertakings which committed it to pay out more than £7 million to 9,000-plus customers.
All those affected were due to get their money back for holidays cancelled due to the pandemic by January 31. However, Lastminute.com still owes more than £1 million to 2,600 customers.
In a response to the CMA’s threats of legal action, lastminute.com said almost 50,000 package holiday customers have already been refunded to the tune of £40 million and only £1.3 million remains outstanding.
“We would like to apologise to those customers still waiting for their package holiday refunds and can assure them that every effort is being made to complete these refunds as promptly as possible,” the firm said in a statement.
“Only a small proportion of bookings are still pending refund: 1.9% of total affected bookings are pending for customer action to be finalised, 2.7% have been partially refunded and 0.6% are remaining to be managed. We have taken, and continue to take, the undertakings very seriously.
It added: “We did not meet the undertaking’s deadline signed on the 27th of November 2020 (which committed us to deliver any pending refunds by 31st of January 2021) for this small proportion of affected bookings because of the unforeseen third lockdown announced in the beginning of January this year, which further impacted the travel sector and added extra pressure to an already challenging process.
“Furthermore in relation to the 2.7% partially refunded bookings, these refer to bookings which included a flight operated by Ryanair.
“Ryanair has publicly informed customers to request refunds directly to Ryanair, irrespectively of how the booking was made and paid.
“This has created a lot of confusion for our customers and us alike, as we do not know which customers have already asked or received a refund from Ryanair. Those customers who do not receive the refund directly from Ryanair are being refunded by us.
“On Monday (February 8) we took the CMA bit by bit through all the technical and operational challenges we are facing because of the unprecedented pandemic crisis and we proposed a detailed action plan to close all pending refunds. We are continuing to make every effort to resolve any remaining delays customers are facing.”
Andrea Bertoli, managing director of Lastminute.com, said: “We sincerely apologise to all customers still waiting for their package holiday refunds and we are making every effort to resolve any remaining delays customers are facing.
“Despite all our efforts and commitment, we did not meet the CMA undertaking’s deadline for this small proportion of customers because of the impact of the unforeseen third lockdown and Ryanair disrupting the refund process.
“We had already outlined to the CMA a detailed action plan to manage all pending cases and continue to work to get all customers repaid.”
The CMA said lastminute.com has failed to meet its ongoing commitment to repay all customers entitled to a refund within 14 days of their package holiday being cancelled on or after December 3, 2020.
“On top of this, Lastminute.com told some package holiday customers to go directly to their airline to get the cost of their flight back. This is also in breach of its commitments and against its obligations under the Package Travel Regulations,” the watchdog said in a statement.
“The CMA has informed Lastminute.com that it will take court action if it does not repay the outstanding refunds within seven days.
“To avoid court action, Lastminute.com must also ensure that customers who book their package holidays from now on will receive a full refund within 14 days where they are legally entitled to their money back following the cancellation of their package holiday.”
Andrea Coscelli, chief executive of the CMA, said: “It is wholly unacceptable that thousands of Lastminute.com customers are still waiting for full refunds for package holidays despite the commitments the company signed with us.
“We take breaches of commitments extremely seriously. If Lastminute.com does not comply with the law and pay people their outstanding refunds quickly, we will take the company to court.”
The CMA said it has written to more than 100 package holiday firms to remind them of their obligations to comply with consumer protection law, and has already secured refund commitments from Virgin Holidays, TUI UK, Sykes Cottages and Vacation Rentals.
Ryanair said it has no commercial agreement with Lastminute.com and reiterated its stance that it does not recognise third parties selling its flights.
The airline accused Lastminute, and other OTAs, of using “fake contact and payment details”, urged customers to book directly and claimed it was offering “reliable customer service and speedy refunds when travel plans are disrupted”.
Ryanair said it has done “everything we can” to assist disrupted OTA customers and pointed those seeking refunds for flight cancellations to its online Customer Verification Form.
A spokesperson said: “Ryanair welcomes the CMA ruling which exposes the unlawful actions carried out by Lastminute.com, who have been blocking refunds from thousands of customers for months.
“Customers would not be waiting to be reimbursed if Lastminute.com did not change customer contact and payment details at the time of booking, a practice by OTAs to prevent customer awareness of overcharging of up to +70% versus booking direct.
“We call on the CMA to ensure Lastminute.com and other similar third party travel websites provide correct customer contact and payment details at the time of booking.”