Australia’s four biggest domestic airlines are revamping their websites in the wake of an Australian Competition & Consumer Commission (ACCC) finding that they misrepresented refund policies in ways that violated consumers’ statutory rights.
The ACCC investigated the airlines based on concerns over published refund policies that included statements that certain flights are non-refundable, or that consumers would need to pay a fee to process a refund.
Such policies contravene Australian Consumer Law (ACL) provisions about the handling of refunds, ACCC chair Rod Sims said in announcing the legally-binding settlements.
Flights and other services are protected with automatic consumer guarantees that cannot be withdrawn simply by wording on a website, Sims said.
“Airlines cannot make blanket statements that flights are non-refundable or charge consumers a fee to get a refund when they are entitled to one free of charge under the ACL.”
Jetstar in Federal Court
Jetstar was singled out as a particularly serious offender after it was found that between April 2017 and March 2018, the airline had published claims that its Economy Starter and Plus Bundle fares were not refundable; that customers could only get fares refunded if they purchased an additional flight bundle; that Jetstar flights were not subject to the ACL or any other statutory guarantees or warranties; and that its liability under any applicable consumer guarantees was limited to providing new flights.
The ACCC petitioned the Federal Court in December for a $1.95m penalty based on claims that the airline had made “certain false and misleading representations to consumers about the nature and potential application of their consumer guarantee rights.”
“This case is important not only for holding Jetstar to account, but sending a wider message that businesses cannot exclude or limit consumers’ rights under the Australian Consumer Law.”
Jetstar’s court-enforceable undertaking with the ACCC will see the airline reviewing its policies, compliance program, website and booking systems for ACL compliance.
This includes a host of internal reviews and the creation of a web page specifically outlining ACL rights, and the inclusion of a link to that page in all communications that the company sends to customers related to cancellations and/or flight delays.
Industry reviews website representations
Australia’s three other biggest domestic airlines were also caught up in the action, with Tigerair flagged for claiming on its web site that consumers had to pay a “refund admin fee” to process a refund, which would only be provided as a six-month credit for later travel on the airline.
Qantas conceded that its website wording “may have misled consumers into thinking that refunds were not available for its ‘Red e-deal’ fares”, the ACCC said, and that its flights were not subject to ACL or other statutory guarantees.
Virgin Australia’s booking websites, the ACCC and airline agreed, “may have created an overall impression that risked misleading consumers about the nature and potential application of their consumer guarantee rights” including that certain fare types were non-refundable, and that the only available remedy would be a 12-month credit.
In line with their own enforceable undertakings, Tiger Airways, Qantas, and Virgin Australia have all launched internal reviews and published pages outlining consumers’ rights under their legal guarantees.
It’s not the first time the ACCC has tussled with the airlines over the wording of their booking engines. In March 2017, the Federal Court penalised Jetstar $545,000 for misrepresenting its prices through its mobile site.
In 2015, ACCC action against Jetstar and Virgin Australia led the Federal Court to rule that the airlines had contravened the ACL over the way their mobile websites were structured to conceal credit-card booking fees.