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Airlines forced to amend policies, issue refunds

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Airlines forced to amend policies, issue refunds

Jetstar planes lined up at an airport terminal

Thousands of Australian air travellers may be entitled to substantial refunds, after the major airlines were ordered to remove policies that breached consumer rules and compensate affected customers.

According to the ACCC, Qantas, Virgin Australia, Jetstar and Tigerair will all amend their policies and processes regarding customer refunds and resupply to remove statements that run contrary to the Australian Consumer Law.

The regulator expressed concerns that the airlines were attempting to circumvent consumer protections around refunds or substitute tickets, particularly where a flight was cancelled or suffered major delays for reasons within the airlines’ control.

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This included charging customers fees to obtain a refund, which by law must be offered free of charge, or offering time-limited credit in lieu of full refunds.

As part of court-enforceable undertakings agreed with the ACCC, all four airlines are required to undertake a detailed review of their policies and statements to customers to ensure full compliance with consumer laws, review past complaints from customers and make reparations to any customers adversely affected by the flawed policies.

It is not clear how many customers may be entitled to refunds, or how much the airlines could be collectively facing in redress costs.

We receive thousands of complaints about airlines each year and we know that this is an area where customers have a lot of problems with consumer guarantees,” a spokesperson for the ACCC said.

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The airlines have today committed to reviewing past complaints, so it is too soon to say how much compensation customers will receive.

But the spokesperson noted that the ACCC received more than 1,400 consumer complaints about airlines between January 2016 and December 2017, including hundreds specifically relating to consumer guarantees and excessive fees.

Jetstar singled out for misleading consumers

The ACCC is taking matters further in relation to Jetstar, with the discount airline hauled before the Federal Court in a bid to demonstrate “the seriousness of its conduct”.

Both parties have jointly submitted to the court that Jetstar be penalised $1.95 million as well as contribute towards the regulator’s legal bills.

It comes after Jetstar admitted that it had marketed some fares as being non-refundable and others as only being refundable if the customer purchased a more expensive airfare, as well as having terms and conditions that claimed consumer guarantees under the Australian Consumer Law did not apply.

“No matter how cheap the fares are, airlines cannot make blanket statements to consumers that flights are non-refundable,” ACCC chair Rod Sims said.

“It’s frustrating for travellers when they have difficulty getting a refund for flights when they are entitled to one.

“This case is important not only for holding Jetstar to account, but [also for] sending a wider message that businesses cannot exclude or limit consumers’ rights under the Australian Consumer Law.”

The court will now determine whether the proposed penalty is appropriate.

Jetstar Group CEO Gareth Evans issued a brief statement acknowledging the ACCC’s review but omitting any direct reference to the legal action.

“We worked closely with the ACCC as part of its review of Australian airlines’ terms and conditions and in July made changes to the wording on our website and added information about customers’ rights under the Australian Consumer Law when flights are delayed or cancelled,” Mr Evans said.

“We also updated our terms and conditions to make it easier for customers to understand when they are eligible for a refund.

“Like other [low-fare] airlines in Australia and around the world, customers who purchase our cheapest fares cannot get a refund if they decide they no longer wish to travel.

“For customers who are likely to change their mind or need flexibility, we have a number of fare types that give them that option.”

Affected customers urged to reach out

Mr Sims said that the airlines will have to contact all affected customers to issue full monetary refunds or other remedies.

But passengers need not wait for the airline to initiate contact in order to obtain money that may be owed to them.

The commission said that anyone who believes they are entitled to redress from an airline can contact them directly on the following numbers:

  • Jetstar: 13 15 38
  • Qantas: 13 13 13
  • Tigerair: 1300 174 266
  • Virgin Australia: 13 67 89
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