Agents urged to charge cancellation fees when 'allowed and reasonable'

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Flight Centre and its subsidiaries Aunt Betty, Travel Associates, Student Universe, Universal Traveller and Jetescape Travel (trading as Byojet Travel) will refund thousands of customers who were charged $300 per person to get a refund for a cancelled international flight or $50 for a domestic flight.

Travel agency angered customers by charging a $300 fee for each element of trips cancelled due to COVID-19.

The Australian Competition and Consumer Commission (ACCC) was preparing to launch court action against Flight Centre for charging fees for refunds before the company agreed to end the practice.

“This is a very welcome move made by Flight Centre for thousands of customers impacted by COVID-19 travel cancellations,” ACCC chair Rod Sims said.

“We are continuing to discuss issues in relation to refunds and cancellations with the travel sector and encourage travel providers to treat consumers fairly in these exceptional circumstances.”

The ACCC has received more than 6000 complaints from consumers dissatisfied with travel companies’ refund policies and cancellation fees, with thousands more contacting their local state or territory fair trading agencies seeking assistance resolving individual disputes.

The Flight Centre policy, in particular, had some bizarre outcomes. According to The Guardian, one Gold Coast family was asked to pay $2100 in cancellation fees for a hotel refund of $1600 for their seven-person Disneyland trip.

The waiver will apply retrospectively to 13 March, and will include any services cancelled by travel providers booked through Flight Centre or Flight Centre-owned businesses.

“The decision to waive fees will impact our business, nevertheless we have heard your feedback and we believe this step is the right one for the current economic conditions where stand downs and job losses are a daily occurrence for many Australians,” said Flight Centre executive general manager Allisa O’Connell.

flight centre office

Travel restrictions have thrown the travel sector into a spin. The substantial losses incurred by COVID-19 have led to some questionable practices by some travel providers.

To mitigate losses, the sector has stressed its preference for giving credit notes, rather than refunds, in the case of cancelled travel.

In light of the significant damage done to the industry, ACCC chair Rod Sims has called on consumers to remain patient and sympathetic.

“While we know some consumers are very concerned about getting a refund or credit for their cancelled travel plans, we do ask people to be mindful of the significant impact that this pandemic has had on the travel industry,” he said.

“We ask consumers to remain patient and be mindful of the significant pressures on businesses at this time and, where possible, contact the business by email or website, rather than by phone,” he said.

“These are very complex issues and may take smaller businesses more time to respond.”

However, just days after Flight Centre said it would be dropping its cancellation fees, the Australian Federation of Travel Agents (AFTA) urged agents to continue to charge cancellation fees where they are “allowed and reasonable”, adding that Flight Centre’s position does not reflect a broader industry position, nor “remove any ability for a travel agent to charge fees for service either in the booking or cancelling of travel”.

“Travel agents can, will and should continue to charge cancellation fees in line with the current legal framework … as long as this is not misleading or excessive then a charge is a reasonable thing to do,” said AFTA.

ACCC chair Rod Sims also confirmed that agents should “look to their terms and conditions and that the matter is in fact a contractual one given that the consumer guarantees do not apply in light of the government intervention”. 

AFTA CEO Jayson Westbury said agents, “are well within their legal rights to charge a fee for the services they render to a client”.

“Suppliers remunerate travel agents for booking travel and typically do not pay agents for time spent on cancellations. As many consumers have found out during this pandemic, the cancellation process is not simple.

“In the current market, the time needed to cancel often complex itineraries, negotiate with multiple suppliers, establish and read the plethora of supplier-issued terms and conditions and work out what is in the client’s best interest and then action an outcome takes significant time.

“In these circumstances, it is completely unreasonable to expect any agent to work for free.”

For more information on consumer rights and obligations of businesses during COVID-19 please visit accc.gov.au

Have you had any problems getting refunds from your travel provider?

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Written by Leon Della Bosca

Leon Della Bosca is a voracious reader who loves words. You'll often find him spending time in galleries, writing, designing, painting, drawing, or photographing and documenting street art. He has a publishing and graphic design background and loves movies and music, but then, who doesn’t?

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5 Comments

Total Comments: 5
  1. 0
    0

    I disagree with AFTA,“travel agents can, will and should continue to charge cancellation fees in line with the current legal framework … as long as this is not misleading or excessive then a charge is a reasonable thing to do,”

    I also disagree with the ACCC chair Rod Sims, confirming that “agents should “look to their terms and conditions and that the matter is in fact a contractual one given that the consumer guarantees do not apply in light of the government intervention”.

    For the start, the COVID-19 Crisis is not a normal situation requiring drastic government interventions. The government has given out $130 billion Jobseeker Rescue Package. Flight Centre should use that to help its staff.

    Secondly, the current legal framework has been overridden by government COVID-19 interventions. To invoke the old law in time of a world phenomenon is hard to justify.

    • 0
      0

      AFTA CEO Jayson Westbury said agents, “are well within their legal rights to charge a fee for the services they render to a client”.
      “Suppliers remunerate travel agents for booking travel and typically do not pay agents for time spent on cancellations. …………………. what else they going to spend time on? hardly busy, busy making new bookings!

  2. 0
    0

    I was in India when they started to close provincial boundaries. I had to leave Bikaner, Rajastan on the day I arrived and managed to book a flight to New Delhi and later that day a flight to Bangkok. I had to cancel about two weeks of accommodation (fees were waived) and two internal flights (I had a choice of a voucher for the full amount or a cash refund of about 45%. Given uncertainties I chose the cash.

    In Bangkok I had to change my flight and Singapore Airlines said to contact you travel agency. I informed them that the agent had unexpectedly gone bankrupt so I was told to deal with their call centre. I could not get through to the call centre so next day it was back to the airport and eventually I managed to get a boarding pass for my flights to Singapore and then Sydney. This change was done without charge as the Airline had cancelled the Singapore to Canberra sector.

    Where flights have been cancelled etc the affected persons should be reimbursed from their insurer. The insurer should not be allowed to hide behind the Pandemic excuse unless the tickets and accommodation etc were purchased after the date that the Pandemic was declared by the Australian Government because at that date it was unreasonable for someone to make a decison further fares etc as there was a very real risk of being unable to travel. Travel agents do a lot of work trying to get good deals for their customers and then get refunds when things go astray. Over time they have saved me a significant amount of money and it is not unreasonable that they be compensated when they have to negotiate cancellations etc. We are encouraged to take out insurance for unforseen events and the Pandemic was an unforseen event.

  3. 0
    0

    I have a family member who is employed by Flight Centre.(YES, STILL EMPLOYED) She has been so distraught working from home and being verbally abused by clients day after day during this pandemic. I wish that people would take the time to realise that there is a REAL PERSON on the other end of the phone, who CAN’T retaliate but must just tolerate the ABUSE. Sorry, but feeling angry. thanks for letting me vent

  4. 0
    0

    We are supposed to have consumer protections in this country but when put to the test it appears, like so many other things, it has all been set up just to look good. The travel insurance industry and the travel agents are once again crying poor so it is all falling back on the consumer who has saved long and hard for an international trip. For some, their last chance at seeing a small part of the world outside their own country. From this point on they are all going to scramble to change any T’s&C’s that might have previously provided some cover for epidemic/pandemic so that none of this will be covered in the future. Will anyone be travelling internationally in the future? I don’t think so. Certainly not the older generation who, from what I can see, give a lot of business to the travel industry. We might as well travel in Australia where we at least have Medicare and public hospitals that will look after us should we become ill.


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