Teletext says ‘large’ VAT refund will be used to repay customers as CMA threatens court action

Teletext refund failure
By Linsey McNeill
30/04/2021 12:37 pm
Home » Teletext says ‘large’ VAT refund will be used to repay customers as CMA threatens court action

The Competition and Markets Authority (CMA) is planning to take Teletext to court after the online travel agent ignored its order to refund passengers for cancelled holidays.

The CMA wrote to Teletext, the trading name of  Truly Holdings, in March following an investigation in which it found that the OTA still owed refunds for holidays cancelled last year.

Hundreds of customers had complained to the CMA, with some claiming that Teletext had promised to refund their money but then repeatedly pushed back the payment deadlines.

The CMA asked Teletext to provide it with formal undertakings that customers would be refunded, but it said the agent has so far failed to ‘provide undertakings that are sufficient to address the CMA’s concerns’.

The CMA has now written to the online travel agent to say that it is preparing to take court action and will launch proceedings if Teletext doesn’t pay the outstanding refunds, or commit to do so, ‘without unnecessary delay’.

Teletext told Travel Gossip it is waiting for a ‘large’ VAT refund from HMRC which, together with shareholder investment, will be used to refund customers. In the meantime, it said it was ‘extremely disappointed’ with CMA’s announcement that it is planning legal action.

CMA Chief Executive Andrea Coscelli said: “There must be no more delays to Teletext refunding customers for holidays they could not take because of the pandemic.

“It is unacceptable that many have already waited months for the refunds they are legally entitled to.

“We take very seriously the ongoing failure of Teletext Holidays to meet its obligations. The firm must now comply with the law and commit to refunding its customers. If it does not do so, we will not hesitate to pursue this case in court.”

In a statement, Teletext said it had ‘consistently stated our commitment to refund all customers as quickly and practically as possible’.

It added: “We have been in continuous dialogue with the CMA providing evidence of why the refund process has been delayed. We have also provided real time plans on how and when we can refund all customers. Therefore, we are extremely disappointed with today’s CMA announcement that seemingly ignores the reality of the challenges we face through no fault of our own.

“The business has already refunded the vast majority of customers and the proposals submitted to CMA detail when we can complete the remaining refunds due.”

Adding that it understands its responsibilities under the Package Travel Regulations, Telextext blamed the refund delay on the volume of cancellations during the pandemic.

“As an online travel agency we book holidays for our customers and money for flights must be paid at the time of the booking.

“Since the commencement of the pandemic we have, and are, experiencing very long delays in the collection of refunds for the consumer from airlines.

“Whilst still facing long delays from airlines, the company has provided shareholder investment and is still due and waiting a large VAT refund from HMRC and these funds have and will be used to enable the company to repay all customers using its own funds.”

Teletext said it has committed to refund all new customers within 14 days of cancellations.

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