LONDON (Reuters) - Britain's competition regulator said TUI UK (L:TUIT) (DE:TUIGn) will refund customers for COVID-19 cancelled holidays by Sept. 30, after it investigated consumer complaints that travel companies were dragging their heels over returning cash.
Under consumer protection law, holiday firms must refund customers for cancelled holidays within 14 days, but during the pandemic the high volume of refunds and strained company finances slowed the return of monies owed.
The UK's Competition and Markets Authority said on Wednesday that it investigated TUI UK, part of Germany-based TUI, which is the world's largest holiday group, following thousands of complaints from customers waiting more than 14 days for refunds.
Consumer group Which? said that holidaymakers are still owed millions of pounds for cancelled holidays and flights, and the CMA said on Wednesday it had written to over 100 package holiday businesses to remind them of their obligations on refunds.
TUI UK has now agreed to pay outstanding refund requests by the end of this month and will also contact customers who have been issued a credit note to advise them that they can convert it to a refund if they want.
The refunds will be a new drain on TUI's finances.
The cash-strapped company has received emergency loans from the German government, and said it is considering raising new equity from shareholders or selling off parts of the business to reduce debt taken on to survive the coronavirus pandemic.
The CMA also said that TUI will report to it regularly over the coming year on the time it takes to refund customers.
