The refunds relate to trips that were cancelled due to the Covid-19 pandemic last year – some Teletext Holidays customers have waited more than a year to get their money back.

The CMA opened an investigation into Teletext Holidays and its sister travel operator, Alpharooms.com on 4 February after receiving hundreds of complaints. These showed that people were not receiving refunds they were owed within 14 days, as required by law, for package holidays cancelled by the company due to the pandemic.

In many cases Teletext Holidays simply ignored correspondence from customers. It also routinely disputed chargeback requests where customers tried to get their money back via their bank.

The CMA told Teletext it must pay up in March – or face court. Then on 30 April, the CMA informed Truly Holdings Ltd, the company that operates Teletext Holidays and Alpharooms, that it was preparing to take court action against the firm for more than £7m in outstanding refunds owed to its customers.

Truly Holdings Ltd has now signed formal commitments, known as undertakings, that ensure affected customers still owed a refund will get their money back. This includes a repayment schedule that prioritises refunds to customers with the longest-standing claims.

Andrea Coscelli, chief executive of the CMA, said: “There’s no excuse for travel firms to delay refunding customers what they are legally owed, even in these extraordinary times. Companies should be doing the right thing without the threat of court action.

“As a result of our work, customers who have waited many months for their money back from Teletext Holidays and Alpharooms will now receive a full refund.

“With international travel resuming and many people considering long awaited trips abroad, all package holiday firms must give refunds within 14 days where these are due, and should also provide clear cancellation information, so that no one else is unnecessarily put through this ordeal.”

Having carefully reviewed Truly Holdings’ financial information and how quickly it can realistically make the repayments, the CMA has accepted its commitment to pay back all customers owed refunds by 31 August 2021 at the latest.

The timeframe that has been agreed balances the challenges experienced by the travel sector as a result of the pandemic with the need to get customers their money back in full as quickly as possible. The company has also committed in its undertakings to refunding in full within 14 days any package holidays it cancels due to the Covid-19 pandemic going forward.

To ensure that the company adheres to its commitments, Truly Holdings has agreed to provide the CMA with regular reports on the progress of its repayments. If the firm fails to repay customers according to the undertakings, the CMA will take it to court.

Customers waiting for their money back should visit www.teletextholidays.co.uk or www.alpharooms.com from 28 May, where there will be dedicated pages explaining the process regarding refunds and a webform enabling customers to request a cash refund.

Teletext Holidays and Alpharooms package holiday customers who have not received cash refunds but who have refund credit notes for their cancelled trips, which have not expired or been redeemed, should receive an email from the company shortly, asking them to confirm whether they want a refund.