Right to Refund threatens to petition courts to wind-up TUI

Right to Refund, funded and led by Vivid Travel boss Kane Pirie, has sent a legal letter to TUI demanding a £1,000 refund for a cancelled holiday it bought from a TUI customer.

If payment is not received by May 5, Pirie said Right to Refund reserves the right to petition the courts for TUI to be wound up. He said he is also looking at buying up other cancelled holidays, including one worth £10,000 from Virgin Holidays, and following a similar process with them.

Pirie has engaged law firm Osborne Clarke to represent Right to Refund, which he launched to try to persuade companies to refund customers whose holidays have been cancelled due to the coronavirus in line with the Package Travel Regulations.

TUI insists it is offering customers cash refunds but says that due to the volume of cancellations it is taking around 28 days for refunds to be processed, which is twice the time permitted by the Package Travel Regulations.

"It is with regret that we have had to take this action but feel it has been made necessary by the casual approach that too many travel companies are currently taking to the law," said Pirie.

He said it was ‘standard procedure’ for businesses to petition to wind-up companies in order to recover a debt and he estimated the legal action would, in this case, cost ‘about £1000’ if the case proceeds to court, but added: "It won’t come to this because TUI will pay up."

While clients who are due refunds have the option to file a small claim via the courts, at a significantly lower cost, Pirie said petitioning for a company to be wound-up was ‘a quick, effective route’ .

"You make it clear you’re not messing about," he said. "This is an efficient process that works. And we’re not stopping here. We’ll buy other holidays and do the same."

He added: "We expect this will lead to an acceleration of payments to many consumers as travel companies realise: they cannot just ignore the law. Enough is enough and we are now calling time on this."

In response, TUI said: "We’re really sorry that some customers have had to wait longer than we expected to receive their refunds. As an industry we are having to adapt to the current crisis and the unprecedented cancellation of worldwide travel. We are processing refunds as quickly as we can and expect any currently outstanding to be paid before the end of next week.

"Where a customer has their holiday cancelled we’re offering them 120% of the amount they paid towards another holiday or they can get a cash refund. We haven’t refused to refund any customers but we’re exceptionally busy and most refunds are taking around 4 weeks to process. This is longer than we would like but these are extraordinary times.

"We are surprised by the Right to Refund press release as we have not had any direct correspondence. They have been quoted saying that they believe all refunds should be paid by July 31, 2020, the original expiry date suggested by Abta. Then later updated their position to say that they are now calling for a "measured and balanced compromise" of six months, in line with the shortest equivalent in Europe – meaning customers would all be refunded by September 17.

"We’re therefore perplexed by this new approach."