The OTA signed formal undertakings with the Competition and Markets Authority (CMA) in December to pay the money back to consumers by 31 January. However, the CMA on Friday (12 February) revealed Lastminute still owed more than £1 million in refunds to some 2,600 customers.

The CMA said the OTA had also failed to meet its commitment to repay all customers entitled to a refund within 14 days of their package holiday being cancelled on or after 3 December 2020.

In addition, the CMA alleges Lastminute told some of its package holiday customers to seek refunds for air fares directly from their airline, a breach both of its commitments to the CMA and of the Package Travel Regulations.

Lastminute has been given seven days to pay all outstanding refunds or face court action; the CMA added it would also look at further legal action if Lastminute fails to refund any new package holiday customers within 14 days if their trip has to be cancelled.

"It is wholly unacceptable that thousands of Lastminute.com customers are still waiting for full refunds for package holidays despite the commitments the company signed with us," said CMA chief executive Andrea Coscelli.

"We take breaches of commitments extremely seriously. If Lastminute.com does not comply with the law and pay people their outstanding refunds quickly, we will take the company to court."

Lastminute committed to refunding at least half of customers whose trips were affected by the pandemic by 16 December 2020, and to pay the remaining refunds no later than 31 January 2021. It signed undertakings on 27 November 2020 and the CMA announced this on 1 December 2020.

The CMA wrote to the OTA ahead of Friday’s threat of legal action under the Enterprise Act 2002.

In a statement provided to TTG, Lastminute said it wanted to "sincerely apologise" to customers still waiting for refunds, confirming there remained a further £1.3 million in outstanding refunds.

It said it did not meet the CMA’s undertaking in relation to a "small proportion" of affected bookings; 1.9% of bookings have been "managed", but are pending final action with the customer, 2.7% have been partially refunded, and 0.6% are pending management.

The OTA has also disclosed to the CMA "the technical and operational issues" that caused the delay, and provided a "detailed action plan" to finalise all outstanding refunds.

Lastminute said it failed to meet its 31 January undertakings to the CMA owing to "the unforeseen third lockdown" announced at the beginning of the year, which it said "further impacted the travel sector and added extra pressure to an already challenging process".

In relation to the 2.7% of outstanding refunds that have been partially paid, Lastminute said these were bookings that included Ryanair flights.

"Ryanair has publicly informed customers to request refunds directly to Ryanair, irrespectively of how the booking was made and paid," said Lastminute.

"This has created a lot of confusion for our customers and us alike, as we do not know which customers have already asked or received a refund from Ryanair. Those customers who do not receive the refund directly from Ryanair are being refunded by us."

‘Sincere apologies’

Andrea Bertoli, Lastminute.com managing director, said: "We sincerely apologise to all customers still waiting for their package holiday refunds and we are making every effort to resolve any remaining delays customers are facing.

"As of today, almost 50,000 package holiday customers have been refunded more than £40 million in the UK and £1.3 million pending.

"Despite all our efforts and commitment, we did not meet the CMA undertaking’s deadline for this small proportion of customers because of the impact of the unforeseen third lockdown and Ryanair disrupting the refund process.

"We had already outlined to the CMA a detailed action plan to manage all pending cases and continue to work to get all customers repaid."