Australian airlines have played one too many games of hardball when it comes to issuing refunds.
And a recent Federal Court decision involving Jetstar has swung the pendulum back in favour of consumers.
Jetstar was recently fined $1.95 million for breaching the Australian Consumer Law (ACL).
Between April 2017 and March 2018, the airline’s website made false or misleading statements that some fares were not refundable and consumers could only get a refund if they purchased a more expensive fare.
In addition, the Federal Court found Jetstar’s terms and conditions breached the ACL by claiming consumer guarantee rights did not apply to the airline’s flight services, and that its obligation to provide refunds or replacement flights was limited.
Jetstar is now reviewing consumer complaints concerning flight delays or cancellations during the period April 10, 2017 to March 13, 2018, and will offer refunds or other remedies to consumers who would have been entitled to them.
So when are you entitled to an airline refund?
Rod Sims, chair of the Australian Competition and Consumer Commission (ACCC), says all flights come with automatic consumer guarantees that cannot be excluded, restricted or modified, no matter how cheap the fare.
“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,” says Sims.
“Businesses simply cannot make blanket ‘no refunds’ statements, because they can mislead consumers into thinking they can never get a refund under any circumstances.
“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.”
Airline refunds a bugbear for years
Erin Turner, director of campaign and communications for the consumer advocate Choice, says the group raised issues with Jetstar’s “no refund” claims in December 2016. It was via Choice’s 2016 Fare Play report and its complaint to the ACCC about misleading airline terms and conditions.
“We congratulate the ACCC on this legal win that shows that businesses can’t opt out of the consumer law. Businesses big and small should take this as a message to take their consumer obligations seriously,” says Turner.
The ACCC began its action in the Federal Court against Jetstar in December 2018. The airline gave the ACCC a court-enforceable undertaking, committing to amend its policies and practices to ensure that they are consistent with the ACL.
Jetstar also committed to reviewing its compliance programs, websites and booking systems to address the ACCC’s concerns. The airline has since made improvements to its websites and policies.
The ACCC says it has made a concerted effort to tackle consumer issues in the airlines industry. In December 2018, the regulator also accepted a court-enforceable undertaking from Qantas, Virgin Australia, and Tigerair.
These are commitments from the airlines that their policies and practices comply with consumer guarantee obligations under the ACL.