LoveHolidays will have to refund £18m to more than 40,000 customers amid Coronavirus disruptions.

The group is one of the UK’s biggest online travel agents and was ordered by the Competition and Markets Authority to issue refunds after the holiday operator received hundreds of complaints from customers.

Andrea Coscelli, chief executive of the CMA, said: “Travel agents have a legal responsibility to make prompt refunds to customers whose holidays have been cancelled due to coronavirus.

“Our action today means that LoveHolidays’ customers now have certainty over when they will receive their money back and they will receive this without undue delay.

“We are continuing to investigate package travel firms and where we find evidence that businesses are breaching consumer law, we will not hesitate to take enforcement action to protect consumers.”

LoveHolidays has said that it will repay customers in full by March 2021. So far it has refunded £7m to 20,000 customers.

So far it has refunded over £205m owed to more than 180,000 customers, which, is the equivalent of 10 years’ worth of refunds in just eight months.

The Package Travel Regulations states that online travel agents are legally bound to refund customers for package holidays cancelled due to the pandemic. This is regardless of whether the holiday operator has received refunds from suppliers, such as airlines.

The latest news is following action by the CMA in investigating holiday cancellations by a number of operators. It has written to over 100 package holiday firms about their obligations to comply with consumer protection law. The CMA has already secured refund commitments from Lastminute.com, Virgin Holidays, TUI UK, Sykes Cottages and Vacation Rentals, explains the CMA in a press release.