Travel refund problems a 'dreadful, dreadful situation': ACCC boss

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Travel-related consumer complaints have risen by 500 per cent since January 2020, with thousands of Australians unable to get refunds for trips cancelled because of the pandemic.

And in disturbing news, 30 per cent of refund applications have yet to be resolved, after 27,817 complaints were made to the Australian Competition and Consumer Commission (ACCC).

ACCC chair Rod Sims told 3AW radio it was a “dreadful, dreadful situation”.

He said would-be travellers’ chances of receiving a refund depended first on whether the company they dealt with was based in Australia. Such transactions would be covered by Australian consumer law. However, that law is often not set up to cover a “COVID crisis”.

It means it all comes down to the terms and conditions of the contract a prospective traveller signed. If that fine print specifies a policy to cover such situations, the consumer is out of luck. But if it is “silent” on what applies, the contract is “frustrated”, and the vendor must supply a refund.

The Neil Mitchell program on 3AW has heard reports of people losing their life savings on cancelled overseas travel. One woman lost $73,000.

Mr Sims encourages consumers to contact the ACCC but says he cannot guarantee every stand-alone case could be satisfied. If a “sufficient” number of consumers contact the agency about a provider, forming a pattern, the ACCC will investigate.

Mr Sims said the ACCC had stopped travel behemoth Flight Centre from collecting large cancellation fees earlier in the pandemic.

The ACCC has a team dedicated to COVID cancellations and has dealt with hundreds of companies, leading to the recovery of “millions” of dollars, Mr Sims said.

Read more: Refund rights

Consumer advocate Adam Glezer is campaigning for Australia to introduce laws that entitle consumers to a full refund if their flight or holiday is cancelled, Nine reports. He says Australian consumers are being “hung out to dry”.

“I’ve dealt with many terminally ill people who are trying to chase a refund. One man had booked his final-ever trip with his wife because she was ill and when she passed away, he was offered a credit on her behalf instead of a refund. There are so many people out there with a feeling of helplessness.”

Mr Glezer also wants new laws to force travel agents to put customer funds in trust accounts and provide customers with detailed terms and conditions for all suppliers involved in their holidays.

Read more: Can your bank recover funds spent on travel?

The Guardian reported that youth travel company Topdeck had arbitrarily booked customers whose trips had been cancelled with credit vouchers on new overseas trips on random dates, without their knowledge or consent.

“In the early stages of the pandemic, Topdeck came under fire for suddenly changing its refund policy and applying it retrospectively to deny refunds to customers whose trips were cancelled.

“It instead began offering credit for future travel, plus an additional $100, which was to expire in December 2021.

“Unwitting customers are being placed on tour dates of Topdeck’s choosing, despite the global crisis, widespread border closures, and restrictions on travel in and out of Australia.”

Cruisepassenger.com.au alleges that online agent Webjet is refusing refunds for a couple who paid $20,000 for a cruise, insisting they accept a credit note – despite the cruise line saying it will pay them back.

The ACCC had discussions with government and state and territory regulators to consider whether changes are needed to address issues that have cropped up during the pandemic.

Read more: Refund rights after a terror attack at a destination

But Australian Federation of Travel Agents chair Tom Manwaring told Nine that legislation is unwarranted because the pandemic is a once-in-a-lifetime experience.

Consumer Action Law Centre chief executive Gerard Brody said the pandemic had highlighted serious gaps in protections for consumers.

“Consumers need a stronger right of refund if services aren’t supplied,” he said.

The organisation is also calling for a new ombudsman to help consumers settle disputes with the travel industry.

How to book with confidence (ABC News / choice.com.au)

Check the words. When you’re reading terms and conditions, look for words such as cancel, refund, credit, force majeure, frustrated contract. If you have a digital copy of the terms and conditions, use the search function as a shortcut. If, after reading the terms and conditions, you’re unsure of whether you’d be entitled to a refund, consider booking elsewhere.

Document everything. Keep copies of paperwork, take screenshots. Airlines, accommodation providers and tourist attractions have different terms in their contracts. Keep a snapshot of what the terms and conditions were at the time you booked because that’s what they’re bound by. They can’t change your contract after the fact.

Research your company. Look at reviews from customers who’ve had their travel cancelled to decide who to book with.

Think twice before using third parties.

Did you have a trip planned last year and are waiting or a satisfactory refund or credit? Are you reluctant to book another trip this year?

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Written by Will Brodie



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