Consumers should be on high alert to avoid being misled about their rights and entitlements when dealing with airlines.
Last week the Federal Court fined Jetstar $1.95 million for making false or misleading representations about consumer guarantee rights between April 2017 and March 2018.
The fine comes after the Australian Competition and Consumer Commission (ACCC) commenced proceedings against Jetstar in December 2018 for breaches of the Australian Consumer Law (ACL).
Jetstar made false or misleading statements on its website that some fares were not refundable, and that consumers could only get a refund if they purchased a more expensive fare.
For those who have experienced delayed or cancelled flights, airlines rarely take responsibility or provide compensation.
Tigerair, Qantas and Virgin Australia entered into enforceable undertakings with the ACCC to review their refund policies.
According to the ACCC merchant services must:
- be provided with acceptable care and skill or technical knowledge and taking all necessary steps to avoid loss and damage;
- be fit for the purpose or give the results that you and the business had agreed to; and
- be delivered within a reasonable time when there is no agreed end date.
ACCC chair Rod Sims says: “Jetstar’s representations were false or misleading because all flights come with automatic consumer guarantees that cannot be excluded, restricted or modified, no matter how cheap the fare.”
Under the ACL, when consumers buy products and services they come with automatic guarantee that they will work and do what they are intended for.
Consumers need to be aware that they can exercise their consumer rights if their flight is delayed, cancelled or advertised as non-refundable.
The ACCC Airline Terms and Conditions Report says: “There does not appear to be a consistent approach by the airlines about the remedies provided to consumers affected by a flight cancellation or delay.”
The consumer watchdog enforces the ACL, which has three guarantees relating to the supply of services such as airline travel:
- guarantee as to due care and skill;
- guarantee as to fitness for a particular purpose; and
- guarantee as to reasonable time for supply.
When these consumer guarantees are not met, consumers are entitled to a remedy.
Sims says: “If a flight is cancelled or significantly delayed, passengers may be entitled to a refund under the consumer guarantees. All consumers have the right to a remedy, such as a refund, if services are not supplied within a reasonable time.”
Airlines make statements on their websites that sale fares, low cost and non-flexible economy fares are non-refundable, which could lead consumers to believe they are not entitled to a refund under any circumstance.
The ACCC report says: “‘No refund’ statements may lead consumers to believe they are not entitled to a refund under any circumstance. However, consumers who purchase goods and services have rights to remedies under the ACL which businesses cannot restrict, alter or remove.”
Sims says: “Businesses simply cannot make blanket ‘no refunds’ statements, because they can mislead consumers into thinking they can never get a refund under any circumstances.”
The ACCC suggests in the event of a dispute with an airline, consumers should keep their tickets, itinerary, boarding passes, receipts and any communications with the airline.
The Qantas-owned airline will review consumer complaints concerning delays or cancellations during the period in which they came under fire and will offer refunds or compensation to eligible customers.
Sims says: “This decision is a warning to all businesses that misleading consumers about their rights breaches the Australian Consumer Law, and doing so may result in multi-million dollar penalties.”
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