The High Court has confirmed Truly Travel and Alpha Holidays, which traded as Teletext Holidays and Alpharooms respectively, failed to appropriately refund customers.
In a case brought by the Competition & Markets Authority (CMA), the companies were found to have breached Package Travel and Linked Travel Arrangements Regulations (PTRs).
These required them to refund customers for package holidays that were cancelled due to the Covid-19 pandemic within 14-days.
The CMA sought a declaration from the High Court in this case to highlight the importance of travel firms respecting consumers’ refund rights.
The body said it wants to ensure that “people can book package holidays with confidence, knowing that their legal rights will be respected if their holiday is cancelled due to unavoidable circumstances outside their control”.
This court action follows a significant programme of consumer protection law enforcement work by the CMA in the package travel sector, which has secured hundreds of millions of pounds in refunds for people whose holidays were cancelled due to the Covid-19 pandemic.
Because Truly Travel and Alpha Holidays have been placed into liquidation, Teletext Holidays or Alpharooms package travel customers with outstanding refunds are encouraged to submit a claim to the Travel Trust Association (TTA), which is now responsible for these.
Andrea Coscelli, chief executive of the CMA, said: “This should be a wake-up call to any business that thinks that it doesn’t need to honour customers’ refund rights.
“Today’s ruling confirms the CMA’s view that Teletext Holidays and Alpharooms broke the law by not providing the refunds customers were due within 14 days for cancelled package holidays.
“While this ruling comes after these firms have been placed in liquidation, we hope the decision will make it easier for people to get their money back for a cancelled holiday in the future.
“Customers of Teletext Holidays and Alpharooms with outstanding refunds should get in touch with the Travel Trust Association.”
The CMA launched court action against Truly Holdings, and its subsidiaries Truly Travel and Alpha Holidays, last year, over outstanding refunds owed to customers.
Truly Holdings had previously signed formal commitments, known as undertakings, requiring them to use all reasonable endeavours to pay outstanding refunds to passengers in an agreed schedule, and to ensure that all refunds due for cancelled package holidays going forward were paid within 14-days.
When the CMA found that Truly Holdings was not fully abiding by these undertakings, the CMA took the company to court.
The court claim for refunds was stayed – paused indefinitely – after the firms entered liquidation, but the CMA continued to seek a declaration from the court that these companies broke the law.
This has resulted in the ruling made today.
Rory Boland, editor of Which? Travel, said: “Teletext Holidays attempted to shirk its legal responsibilities to refund customers within 14-days for cancelled trips, leaving its exasperated customers out of pocket for years.
“Holidaymakers have been badly let down, but this important court ruling means they should finally be able to claim the money back they are owed.
“Teletext is not the only holiday company to break the law over refunds in recent years.
“The government must ensure there are better protections for holidaymakers’ money by giving regulators stronger powers to take action against companies that break consumer law – including the ability to impose fines if necessary.”