The police launched an investigation today after several people who had booked holidays with Fantasy Tours reported receiving an SMS message telling them that their holidays have been cancelled.

The agency's offices were closed and no one answered the phone. The police said they were holding a person as part of investigations into misappropriation, but did not mention the company.

The company made no announcement other than a notice on its website saying that it recently underwent a restructuring process and was now under new management. It was still advertising tours for September. But its facebook page featured several posts by people expressing anger over the cancellation of their holidays and demanding their money back.

People who contacted timesofmalta.com said they had received a message saying: "We regret to inform you that due to reasons beyond our control, Gold Travel Club Ltd has been compelled to cease operations with immediate effect and your travel arrangements cannot be honoured."

A woman who is currently on holiday in Corfu arranged by the agency said they had been assured that an Air Malta flight would bring them back to Malta on Friday.

Another man said he did not know whether a cruise due to start this week would materialise.

In November, the Malta Competition and Consumer Affairs Authority issued a warning that the travel agency was offering an “unsatisfactory” service.