The CMA on Thursday (21 May) confirmed its investigation, launched last month and led by its Covid-19 taskforce, would look beyond an initial brief to explore complaints about refunds for cancelled holiday accommodation, wedding, and events and nursery bookings.
It comes despite assurances given to both Abta and the CAA, which operates the Atol scheme, that package travel was not under investigation "at all".
According to the CMA, holiday-related cancellations and refunds now account for nearly 20,000 complaints, more than half of all cancellation and refund complaints received by the CMA since 20 March, and airlines a further 7,500.
Its holidays segment covers package and accommodation bookings, as well as bookings made via travel agents and booking sites. Around half of the CMA’s "holiday" complaints relate specifically to package holiday providers.
Following input from other enforcement agencies such as Trading Standards and consumer organisations including Which? and Citizens Advice, the CMA said cancellations and refunds had overtaken price hikes as the most common cause of complaint, with holidays among the most complained-about sectors.
The CMA said its investigation had been widened to include package holidays "based on the number and nature of complaints being received" about the sector. It said concerning practices included refusing refunds; making it "very difficult" for consumers to obtain refunds; and insisting consumers rebook or accept vouchers.
If the investigation finds companies failing to comply with the law, where there is evidence, the CMA says it will take "appropriate enforcement action", which could include taking a firm to court if it does not address its concerns.
Abta has reiterated it will take its own enforcement action, including potentially revoking membership, if it finds its operator members actively refusing to offer refunds.
In a statement, Abta said: "Abta supports the CMA’s position which highlights in which circumstances they expect consumers to be provided a full refund by the travel service supplier and we agree that timeframes and terms for providing refunds should be made clear to consumers and that consumers should not be misled or pressurised.
"When customers request a cash refund for a cancelled package holiday the majority of tour operators are providing them as quickly as they are able to, which is Abta‘s expectation of its members.
"However, the long delays in getting money back from airlines and other suppliers and the sheer volume of enquiries is making it virtually impossible to do so in 14 days. If a company is an Abta member and refuses a refund for a package holiday, then we will investigate this under our code of conduct."
The CMA said further information about its work in respect of package holidays would be made available in due course.
