FURIOUS holidaymakers say they have been left thousands of pounds out of pocket after a Sunderland sunshine breaks company ceased trading.
A number of disappointed people have contacted the Echo after bookings they made with First for Holidays Ltd never went ahead.
Just weeks before being due to set off on planned breaks, customers say they discovered their flights and hotel bookings were not in place.
Police said a 27-year-old woman has been arrested on suspicion of fraud by false representation.
The woman who is believed to have run the company has sent out a letter to say that it has “ceased trading” and that steps to take the firm into insolvency have begun.
It also says anyone claiming a full refund can do so. A website for the firm has been disabled.
A letter sent out to those affected by the closure of First for Holidays read: “I am regretfully writing this letter to inform you as of 08/01/15 First for Holidays Ltd has ceased trading upon seeking legal advise (sic), and necessary steps for insolvency have begun, I have been advised it is the interests of both myself and my customers and will no longer be continuing with any bookings and all current bookings are now void, and I therefore would urge you to contact your card Issuer/Bank/PayPal (depending on which method you paid) or travel insurance company to initiate a full refund.
“I would like to apologise for any inconvenience and stress caused, I have worked tirelessly over the last two years to make this business a success and unfortunately I regret to say it no longer viable.
“Due to serious allegations being made about myself via social media I have spoken to the UK Fraud team who upon discussion clarify no fraud has been committed, as I have not set out to scam people and as above please claim a full refund by referring to your original payment method issuer.
A spokeswoman for Northumbria Police said: “Police have received a number of reports and are aware of concerns raised on social media about a suspected fraud and are carrying out inquiries in relation to these.
“A 27-year-old woman has been arrested on suspicion of fraud by false representation and is helping police with their inquiries.”