Lastminute.com has agreed to repay more than £7 million owed to customers whose package holidays were cancelled due to the Covid-19 crisis.
More than 9,000 customers are waiting for refunds, and the move follows pressure from the Competition & Markets Authority (CMA).
The government watchdog is currently chasing more than 100 package holiday firms to get refund commitments.
The holiday firm was told to repay customers after hundreds of complaints it was delaying repayments owed to passengers.
The firm has agreed to repay at least half of customers by December 16th and the rest by no later than the end of January.
Andrea Coscelli, CMA chief executive, said: “Online travel agents have a legal responsibility to provide prompt refunds to customers whose holidays have been cancelled due to coronavirus – irrespective of whether the agent received refunds from airlines and accommodation providers.
“Our action today means that customers whose holidays were cancelled by lastminute.com will receive their money back without undue delay.
“The CMA is continuing to investigate package holiday firms following concerns that people are not getting the refunds they are entitled to when bookings cannot go ahead because of the pandemic.
“If we find that businesses are breaching consumer protection law, we will not hesitate to take further action.”
In October, the CMA received a commitment from Virgin Holidays to refund all customers “without undue delay” after hundreds of complaints were made over delayed payments.
The watchdog also wrote to more than 100 package holiday firms earlier in the year to remind them of their refund obligations, and got commitments from Tui, Sykes Cottages and Vacation Rentals to repay customers.
Package holiday customers are legally entitled to refunds within 14 days for cancelled trips.