The court agreed with the Competition and Markets Authority (CMA) that Truly Travel and Alpha Holidays had broken the PTRs and Linked Travel Arrangements, requiring companies to issue package holiday clients whose bookings were cancelled due to Covid with a refund within 14 days.

The CMA said it has sought a High Court declaration on the case to “highlight the importance” of travel firms respecting consumers refund rules and to ensure the public could “book package holidays with confidence, knowing their legal rights will be respected”.

Court action against Truly Holdings and its subsidiaries Truly Travel and Alpha Holidays was launched by the CMA last year.

Truly Holdings had previously signed formal commitments, known as undertakings, requiring the business to “use all reasonable endeavours" to pay outstanding refunds to passengers in an agreed schedule, the CMA said. 

The company also needed to ensure all refunds due for cancelled package holidays going forward were paid within 14 days. 

When the CMA discovered Truly Holdings “was not fully abiding by these undertakings”, the watchdog took the company to court.

The court claim for refunds was paused indefinitely after the firms entered liquidation but the CMA continued to seek a declaration from the High Court.

As Truly Travel and Alpha Holidays have been placed into liquidation, Teletext Holidays or Alpharooms package customers with outstanding refunds are encouraged to submit a claim to the Travel Trust Association.

Andrea Coscelli, chief executive of the CMA, said: “This should be a wake-up call to any business that thinks that it doesn’t need to honour customers’ refund rights. Today’s ruling confirms the CMA’s view that Teletext Holidays and Alpharooms broke the law by not providing the refunds customers were due within 14 days for cancelled package holidays.

“While this ruling comes after these firms have been placed in liquidation, we hope the decision will make it easier for people to get their money back for a cancelled holiday in the future. Customers of Teletext Holidays and Alpharooms with outstanding refunds should get in touch with the Travel Trust Association.”