The holiday letting company that owns Hoseasons and Cottages.com has agreed to give customers refunds for stays that were cancelled because of the coronavirus crisis, after it was reported to the competition watchdog.
Vacation Rentals, which has a range of holiday brands and accommodation websites, including Welcome Cottages and Landal GreenParks, had originally refused to give money back to customers.
Customers reported the firm to the Competition and Markets Authority (CMA) after they were offered vouchers, which had to be used to rebook by the end of August.
It is the first victory for the watchdog against companies refusing to refund customers for goods or services cancelled because of the pandemic, and a government ban on non-essential travel.
Vacation Rentals has made a formal commitment to the CMA to give customers the option of a full refund, while informing them of the new policy on its website and providing monthly reports on the number of refunds it has made.
However, the CMA is warning that other holiday rental companies have not yet agreed to follow suit, and it is continuing its investigation.
The watchdog said its Covid-19 taskforce has already received about 4,500 complaints about UK holiday rental companies, of which Vacation Rentals accounted for a significant proportion.
It set up the taskforce during the lockdown to monitor the market and identify the biggest problems facing consumers.
Consumers have complained that companies are refusing to provide them with full refunds, or are offering vouchers instead of cash.
The CMA vowed in April to get tough with firms failing to give refunds to customers and threatened to take them to court if they did not comply.
The CMA chief executive, Andrea Coscelli, called on other holiday accommodation firms to do the same as Vacation Rentals.
“We know the pandemic is presenting businesses with challenges too, but it’s not right that people are being left hundreds or even thousands of pounds out of pocket – on top of having to sacrifice their holidays. Consumer protection law exists for a reason; businesses must observe the law or face the possibility of enforcement action,” he said.
The watchdog has previously said that complaints about cancellations and refunds account for four out of five reports to its taskforce.
It identified holiday accommodation as an area of particular concern, along with weddings and private events, and nurseries and childcare providers. It is also investigating package holiday providers.
Consumer group Which? said it had reported Hoseasons and Cottages.com to the CMA, but warned not all companies are changing their refund policy.
“There are still many customers struggling to get their money back for cancelled holiday accommodations and package travel bookings,” said Rory Boland, travel editor at Which?. “The CMA must continue to investigate these sectors and come down strongly on any firms found to be flouting the law.”
