More than £1bn of holiday refunds are still being withheld by travel companies

Customers are still waiting for more than £1 billion in refunds from travel firms for package holidays that have been cancelled due to the ongoing pandemic.

Estimates from a survey conducted by Which? have found that customers who asked for their money back are still owed partial or full refunds.

14 day legal limit for refunds

More than four in 10 holiday cancellations have ended in people waiting over a month to get their money back, according to Which?, despite a 14 day legal time limit to issue refunds.

The consumer watchdog surveyed more than 7,500 people who had a package holiday cancelled as a result of the pandemic, as well as population figures.

An estimated 9.4 million package holidays have been cancelled by providers since the UK first went into lockdown in March, with refunds for one in five (21 per cent) of holidays - where a cash refund was requested - still outstanding at the start of October.

For 43 per cent of the cancelled holidays reported to Which?, customers said they waited longer than a month to get their money back.

Research has suggested that the average cancelled holiday cost £1,784 and, under Package Travel Regulations 2018, if it is cancelled by the provider, customers are legally entitled to a full refund within 14 days.

However, the sheer volume of cancellations has meant customer service phone lines have been overwhelmed by people trying to get in touch about getting their money back.

The situation is now expected to get even worse following new restrictions that will come into force in England on 5 November, which will ban most international travel.

Travel guarantee fund

During the summer, the Competition and Markets Authority (CMA) launched an investigation into package travel companies’ handling of cancellations and refunds.

Which? is now calling for the government to introduce a travel guarantee fund to support package holiday providers who are struggling to fulfil their legal obligations to refund customers.

The watchdog has also suggested the government should conduct a review of passenger protections following the coronavirus outbreak.

Rory Boland, editor of Which? Travel, said, “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.”