Virgin has agreed to refund all customers whose package holidays were cancelled due to the coronavirus crisis, after an investigation found hundreds of customers are still in limbo over March cancellations.

The company has put aside a £203million budget after many customers raised concerns that they would never get their money back.

On Friday, the Competition and Markets Authority (CMA) said all package holidays will be refunded following an investigation into Virgin’s refund practices.

"The Competition and Markets Authority has been investigating Virgin Holidays after receiving hundreds of complaints that people were not receiving refunds for holidays cancelled due to the pandemic," a statement said.

"Even when customers were informed by Virgin Holidays that they would receive a refund, many had to wait for an unreasonably long time, with some being told they would have to wait 120 days to receive their money back.

Are you still waiting for a Virgin Holidays refund? Get in touch: [email protected]

All package holiday customers will get their money back by November 20

"Since 1 March 2020, the company has received 53,000 refund requests.

"The CMA has now secured formal commitments from Virgin Holidays - known as undertakings - that ensure all of its customers receive their money without undue delay."

Holidays cancelled before September 1, 2020 will be repaid by October 30, 2020, the CMA said.

Holidays cancelled from September 1, to October 31, 2020 will be repaid by November 20, 2020.

The CMA said it will take the company to court if it fails to meet the refund deadline.

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It said anyone entitled to a refund for a holiday cancelled on or after 1 November 2020 will be paid within 14 days.

These rules apply to all Virgin Holidays businesses that offer package holidays, including Virgin Holidays Cruises.

Andrea Coscelli, chief executive at the CMA, said: “People whose holidays have been cancelled due to coronavirus deserve a prompt and full refund.

"Our action means that Virgin Holidays customers should receive all their money back without further delay.

"We are continuing to investigate package holidays in relation to the coronavirus crisis. Should we find that any business is not complying with consumer protection law, we won’t hesitate to take action."

A Virgin Holidays spokesperson added: "We are pleased to confirm that an outstanding 1,300 refunds will be processed by the end of 23 October, as planned and communicated to our customers.

"Since March, the impact of Covid-19 and subsequent global travel restrictions has led to a huge volume of holiday cancellations. The unprecedented volume of refund requests we have received, combined with constraints on our teams and systems during the pandemic, created significant challenges in the processing of refunds.

"Throughout the crisis we have sought to make improvements wherever possible, including increased processing capability and expanded refund teams.

"We have gradually reduced refund timeframes and are now 98% through the refund queue, with a remaining 1,300 bookings to be processed on Friday 23 October, in line with our plan to do this by the end of October.

"At every step of the way we have monitored refunds progress carefully against our commitments and will return Virgin Holidays refunds in the normal timeframe of 14 days in November."

The CMA said it has written to over 100 package holiday firms who have failed to meet the 14-day refund deadline.

So far, TUI UK, Sykes Cottages and Vacation Rentals have agreed to pay out.