Budget carrier faces $2 million fine over misleading refund claims

Budget carrier faces $2 million fine over misleading refund claims | Insurance Business

Budget carrier faces $2 million fine over misleading refund claims

Brokers may need to educate their clients about their rights to refunds should their flights be cancelled or delayed in light of a recent case Australia’s consumer watchdog filed against a budget carrier.

Jetstar has been taken to court by the Australian Competition and Consumer Commission (ACCC) over allegedly misleading claims about which passengers were entitled to refunds, which could cost the Melbourne-headquartered company nearly $2 million in fines.

ACCC wants to fine Jetstar $1.95 million after the airline’s website allegedly informed passengers that not all fares were refundable, and that refunds are only available to consumers who bought more expensive tickets, news.com.au and PerthNow reported.

“No matter how cheap the fares are, airlines cannot make blanket statements to consumers that flights are non-refundable,” said Rod Sims, ACCC chairman. “It’s frustrating for travellers when they have difficulty getting a refund for flights when they are entitled to one.”

Jetstar also conceded that its terms and conditions wrongly told consumers that standard consumer guarantees did not apply to its flights, the reports said.

Gareth Evans, Jetstar Group CEO, said the company’s terms and conditions on its website have already been updated to provide clarity about passengers’ refund rights.

“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 and Jetstar are now awaiting approval from the Federal Court regarding the airline’s $1.95 million penalty plus a contribution to ACCC’s costs.

Airlines are obligated to refund passengers if a flight delay or cancellation is due to an issue under their control, but for circumstances outside their control, such as wild weather events, travel insurance would prove useful.

ACCC’s Sims said the 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” news.com.au and PerthNow reported.