Jetstar faces $2m fine for misleading passengers over refund rights

Advertisement

The consumer watchdog has put the Australian airline industry on notice over passengers’ rights to refunds should flights be delayed or cancelled.

The Australian Competition and Consumer Commission (ACCC) has brought legal proceedings against budget airline Jetstar following concerns that it made false or misleading representations to consumers about their rights to receive a refund in the event of significant delay or cancellation.

Tigerair, Qantas and Virgin Australia were also flagged by the ACCC for misleading refund practices and have submitted court-enforceable undertakings, in which each has committed to reviewing their refund policies, compliance programs, websites, and booking systems to ensure compliance with Australian Consumer Law (ACL).

Jetstar, Qantas and Virgin Australia will also review some previous consumer complaints and offer refunds to those who were entitled to some remedy, but did not receive it.

“Jetstar, Tigerair, Qantas and Virgin Australia have provided substantial undertakings to the ACCC and in doing so have committed to doing the right thing by their passengers in relation to refunds and other remedies under the consumer guarantees,” ACCC Chair Rod Sims said.

Passengers may be entitled to a refund if a flight is cancelled or delayed for a reason within the airline’s control. Each airline will create a page on its website that details these rights and other consumer guarantees under the ACL.

Airline websites will also include instructions for customers on steps they can take to seek a remedy with the airline if a flight is significantly delayed or cancelled.

“Passengers will now be offered refunds or other remedies by these airlines when there has been a failure to supply the service within a reasonable time,” Mr Sims said.

Each airline is believed to have made misleading representations about available remedies to varying extents. However, the ACCC considers that the most concerning case of this was from Jetstar, which now faces court proceedings.

Jetstar said it has updated the terms and conditions on its website to be clearer about passengers’ refund rights.

“We take our obligations under Australian Consumer Law seriously,” Jetstar Group Chief Executive Officer Gareth Evans told News.com.au.

“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.

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

ACCC takes action against Jetstar

The ACCC has instituted proceedings against Jetstar Airways for making alleged false and misleading representations about consumer guarantees under the ACL.

Jetstar admits that its website included statements that some fares were non-refundable and that customers could only get a refund if they purchased a more expensive replacement flight.

The ACCC says that under consumer guarantees, airline passengers have a right to a remedy if services, including flights, are not supplied within a reasonable time frame.

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

Jetstar also admitted that its terms and conditions included representations that consumer guarantees do not apply to its flight services and that its liability to provide refunds was limited.

The ACCC is seeking court approval for a $1.95 million penalty, plus a contribution to ACCC costs.

“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 sending a wider message that businesses cannot exclude or limit consumers’ rights under the Australian Consumer Law,” Mr Sims said.

Customers seeking more information on their rights regarding flight delays and cancellations can find comprehensive guidance on the ACCC website.

Share this article

News & Tips

Sign up to receive more news like this straight to your inbox

By subscribing you agree to the Canstar Privacy Policy.

Thanks for signing up!

Good things are coming your way.

Advertisement