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Virgin Holidays has been ordered to meet refund deadlines following Covid-related cancellations or face court action by the regulator. The company has agreed to pay refunds by 30 October for any holidays cancelled before September.

Those cancelled last month or this month will be refunded by 20 November. By law, package holidays cancelled by an operator should be refunded within 14 days, but some people have waited three months to get their money back.

Virgin Holidays has received 53,000 refund requests since the start of March, totalling £203m – a situation which it said had put the company under “extraordinary pressure”. The company said it had 1,300 claims left to process, which it said would be done by the end of the day.

The Competition and Markets Authority (CMA) said it had received hundreds of complaints that people were not receiving refunds for holidays cancelled owing to the pandemic. It said many customers had been forced to wait for an “unreasonably long time”, with some told the refunds would take three months.

If Virgin Holidays fails to hit its deadlines, the regulator said it was prepared to take the company to court. This included refunds for Virgin Holiday Cruises.

Andrea Coscelli, chief executive at the CMA, said: “Our action means that Virgin Holidays customers should receive all their money back without further delay. “We are continuing to investigate package holidays in relation to the coronavirus crisis. Should we find that any business is not complying with consumer protection law, we won’t hesitate to take action.”

The regulator has issued similar warnings to other companies including Sykes Cottages and Vacation Rentals. A spokesman for Virgin Holidays said: “We have gradually reduced refund timeframes and are now 98% through the refund queue. “Our focus now is on rebuilding trust with our customers, recognising that it has regrettably taken much longer than normal to process their refunds. We thank them sincerely for their patience throughout.”

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