Vacation Rentals has changed its refund policy after initially failing to offer refunds to all customers whose trips were cancelled due to coronavirus.

The firm has now given the Competition and Markets Authority (CMA) a formal commitment that customers will have the option of a full refund if a booking has been cancelled because of the pandemic.

The firm was previously criticised for failing to refund customers who booked holiday homes but could not stay in them due to lockdown restrictions. It has agreed to provide the CMA with monthly reports on how many refund offers have been made and accepted.

Vacation Rentals operates popular accommodation sites including Hoseasons and Cottages.com. It was one of a number of companies reported to the CMA’s COVID-19 Taskforce, set up to monitor and identify problems facing consumers as a result of the pandemic and the lockdown.

The Taskforce has received about 4,500 reports about UK holiday rental companies, with complaints about Vacation Rentals making up a significant proportion of those reports.

Common complaints include companies refusing to provide refunds or offering only vouchers instead of cash refunds.

Holiday accommodation was named as a sector of particular concern when the CMA launched its investigation into cancellations and refunds, along with weddings and private events and nurseries and childcare providers. It has since expanded the scope of its investigation to also include package travel.

But although Vacation Rentals has changed its policy, other holiday lets firms have not yet agreed to follow suit, and the CMA’s investigation into these companies is continuing.

Andrea Coscelli, CEO of the CMA, says: “Our COVID-19 Taskforce is working hard to ensure that consumers get what they are entitled to, so it’s good news that Vacation Rentals has agreed to offer people the refunds they are due. We welcome this step and other holiday lets firms must now follow suit.

“We know the pandemic is presenting businesses with challenges too, but it’s not right that people are being left hundreds or even thousands of pounds out of pocket – on top of having to sacrifice their holidays. Consumer protection law exists for a reason; businesses must observe the law or face the possibility of enforcement action.”

Rory Boland, Which? travel editor, says: “We reported Hoseasons and Cottages.com to the CMA for using potentially unfair terms and conditions to deny refunds for cancelled holidays, so it is good to see these companies have now made a commitment to the regulator to ensure customers will receive the refunds they are entitled to.

“While it is positive to see some firms changing their policy on refunds, there are still many customers struggling to get their money back for cancelled holiday accommodations and package travel bookings. The CMA must continue to investigate these sectors and come down strongly on any firms found to be flouting the law.”