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Last Minute.com air cancellation refund problem

watertransport
watertransport Posts: 1 Newbie
edited 3 February at 4:56PM in Flights, currency & car hire
I booked a business class flight Manchester-Dallas through Last Minute.com 4 months in advance (stupid in retrospect but at the time I had a halo effect from when the company was an innovative startup, before it was sold). Aer Lingus/American Airlines cancelled the flight with 48 hrs notice and no offer to re-book. Having waited over 4 months for my full refund I'm now offered a LM voucher for the full amount (£6000) or ~£2000 cash refund from the airline through them. I find myself in a jungle. The original invoice shows EUR 2325 for the flight and EUR 3960 for agency fees! LM say they won't refund the agency fees (I saw nothing in the original T&C's to say that). At the time of booking the cost of the flight via the airline itself was ~£7-8000. 
What is going on?
  1. How can the Agency get a flight for a quarter of the airline cost?
  2. With regular agency fees of say 10%, how can LM charge 170%? Feels like a scam?
  3. i understand there's a law that full refund is due on such late cancellation, including the Agency fees - is this true and is it enforceable for LM, who say they're subject to UK and EU law?
  4. Do i have other recourse?
  5. Have others experienced this (there's alot on online forums about this company....)?

Thanks for any advice or commiseration    
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