Australian consumer group CHOICE calls for ‘travel refund rights’

Seven-point package of reforms for airline and travel industry includes independent ombudsman and minimum credit rights.

By David Flynn, July 8 2021
Australian consumer group CHOICE calls for ‘travel refund rights’

There are probably very few Australians who’ve not been caught out by cancelled flights, cruises, tours and accommodation bookings in the 18 long months since the coronavirus pandemic first arrived.

And as the newer, more infectious Delta variant of COVID triggers another wave of  lockdowns and border closures, consumer group CHOICE says it’s past time for stronger protections to be in place.

The independent body is calling on federal and state governments “to fix Australia's travel cancellation chaos through implementing seven urgent reforms.”

“When the COVID-19 pandemic hit in early 2020, thousands of Australians had money tied up in bookings with travel and tourism businesses located in Australia and overseas,” CHOICE says.

“The announcement of the pandemic and associated public health measures meant that these plans fell into disarray. As consumers sought to change their plans or obtain refunds, many experienced stress and frustration.” 

A survey of over 4,400 Australians whose travel plans were disrupted by COVID-19 revealed that

  • fewer than one in five (17%) received a full refund, and even that process often took many months 
  • many consumer who've received credits or vouchers say they're unlikely to be able to use them
  • nine out of 10 respondents say Australia’s laws should be changed to make it easier to get your money back 

CHOICE is proposing a set of reforms to “improve consumer protections for people who book travel or tourism services that cannot be provided due to circumstances outside the control of the business and consumer.”

Or, in plain English, “make it easier to get a refund when a service isn’t provided.”

A centrepiece of the seven-point package is the establishment of an independent  travel and tourism industry ombudsman, similar to those in place for the telecommunications and financial industries.

“All airlines, along with large travel and tourism suppliers, large travel agents and large intermediary companies should be required to participate in the industry ombudsman scheme,” CHOICE explains.

The ombudsman should: 

  • be initially established and funded by government with a plan for transition to an industry-funded model; 
  • be governed by a board that includes equal numbers of consumer and industry representatives and an independent chair; 
  • be responsible for investigating complaints against travel and tourism businesses; 
  • have the power to issue determinations and decisions which industry are obliged to act on; and 
  • be required to comply with the Benchmarks for Industry-based Customer Dispute Resolution Schemes

Other planks in the CHOICE proposal call for

  • a mandatory industry code for all airlines and large travel providers
  • changes to make it easier for people to receive refunds
  • minimum voucher/credit rights
  • a mandatory information standard at time of booking
  • an ACCC market study into the travel and tourism sector
  • a national travel restrictions website

“It’s been an extraordinary time in the travel industry,” relates CHOICE’s Andy Kollmorgen.

“Trying to sort out travel cancellations and refunds has often involved punishingly long waiting times on the phone and a wearying game of pass the buck: airlines, accommodation providers and other travel businesses tell customers to take it up with their travel agent or third-party booking site, who then send customers back to where they started.”

“In many cases, it wasn't clear to who had the money – the travel provider or the booking agent, and they often seemed to be battling it out between themselves, leaving customers in the dark.”

Click here to download the CHOICE report and proposals.

 

David

David Flynn is the Editor-in-Chief of Executive Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.

20 Jun 2020

Total posts 29

Still chasing Qantas for my cash refund from May last year...

Zac
Zac

23 May 2014

Total posts 129

It should be simple - if a flight you have paid for isn’t operating, you should be entitled to a full refund, promptly.

Any other complexity around it is not your problem - things like who has given your money to whom, T&Cs that a company has written to avoid refunds, the airline having automatically rebooked you to protect the revenue, other policies etc. - should all be irrelevant if the flight you’ve booked isn’t operating.

this sense of entitlement drives me crazy. Many travel businesses weren't making money before covid. If they have no cash flow, many have no funds for refunds. Banks won't refund via credit cards unless they get money from the business. Many airlines lease all their aircraft & actually own very little, ie. few desks & phone system, which obviously worth very little.

Tav
Tav

20 Oct 2020

Total posts 9

I’m not sure it’s an “entitlement” to expect a refund for something you bought but didn’t receive. I agree those businesses that are on a knife-edge need support and deserve it, but we need the government or insurers to wear that risk, not consumers who booked in good faith. Appreciate that’s probably not a popular position amongst travel providers, government or insurers - but this is what consumer protections are for..

Qantas - Qantas Frequent Flyer

26 Nov 2012

Total posts 83

This response is really interesting to me. As a small business owner if I don’t provide the service offered, my customers expect money back (as well they should). Why should airlines and travel be exempt?  

Your argument is basically saying these travel ‘businesses’ aren’t real businesses because they have no cash or assets.  In the world of business, if you are selling products and can’t meet your contractual obligations then you are insolvent and would be shut down. If they weren’t making money before COVID, then perhaps it was a sign. Every other industry has to manage all the things you mention and so should travel companies. 

I’m not unsympathetic to the industry but the rest of us business owners had to deal with some pretty awful stuff too and still managed to meet our consumer obligations. 

& how many restaurants, bars, builders etc. have gone belly up due to incorrect govt decisions. Doesn't mean creditors get paid anything.

So what's your solution ?

Should people ignore these govt restrictions altogether ? They are nothing to do with health, just power, which they have assumed without being challenged, and why can poms fly to 100 countries in 9 days time without any restrictions or quarantine ? If the same borders open to poms are open to australians, they travel business would have some positive cash flow & might be able to honour credits, instead of going belly up.

BTW-many airlines never ever make any money. They are in place to serve the country. Could name quite a few.

I booked a holiday for May/June 2020.  Paid for pre-existing medical cover in Aug 2019, added to credit card cover.  The trip was cancelled because the borders were closed.  My original plan was to postpone for 12 months, then in Aug 2020 I was diagnosed with lymphoma, so decided that it wouldn't be wise to go overseas for quite some time.  Insurance was denied because 'Covid was the reason I couldn't use the credit'.   Air fare to UK still held by airline, cruise in Russia still in credit (I think), coach tour refund received within a couple of weeks or so.  That leaves me about $8 000 or $9 000 out of pocket.

Lmc
Lmc

Qantas - Qantas Frequent Flyer

09 Nov 2018

Total posts 97

Domestically stop closing the borders ever five minutes for a few covid cases and we wont need to be having this discussion. I have received all my international refunds back, some taking longer than expected. 

I have written off a $300Thai air Asia credit given there current situation!  

Virgin Australia - Velocity Rewards

07 Dec 2014

Total posts 173

Rodd Simms should be removed as ACCC head. His focus has been on inconsequential matters - such as the TPG-Vodafone merger. That has has the wrong focus is demonstrably proven by the frequent court losses faced by the ACCC.

Meanwhile, millions of Australian consumers have been badly hit by money lost over COVID travel plans (I have over $1,000 in 'future flight credit' with Virgin. This is essentially money paid for services not delivered. And the ACCC was no where to be seen through all of this. It is shameful.

Virgin mark 2 is not Virgin mark 1. If your credit is with virgin mark 1, you'd be lucky to get anything back.

Virgin Australia - Velocity Rewards

07 Dec 2014

Total posts 173

My bank, when asking for a chargeback, explicitly cited ACCC guidance that basically said they could screw me due to COVID-19 and the fact I had received the shoddy credits VA has given. Its not just about Virgin, its about the behaviour of the banks too, and the ACCC absolving them of their responsibilities.

06 Feb 2014

Total posts 17

Very glad to see this being called out. While I know its tough on the businesses involved all that is going on, some of the onerous terms put up by individual companies about how you can get refunded (in many cases you can't), what time limits there are on using 'credit', and a range of other limitations can make it a very frustrating process. I hope that eventually out of COVID-19 we will see a far simpler, more consumer friendly approach forced upon those businesses that see matters completely out of the control of individual consumers as fair game for making it as hard as possible for one to actually get a refund.

mcs_095

there is no simply solution. Businesses use funds when received for many uses such as paying banks, rent, wages & lots of other businesses costs. The previous travel compensation fund, was so useless it was wound up.

good luck getting money from a stone.

If a business goes broke, no one gets paid except maybe ATO, secured creditors & accountants winding up the company.

28 Apr 2021

Total posts 2

We had booked $7500 flights to UK with Emirates through BYO jet. Booked in October 2019. Due to travel 2 Apr 20. Let the airline cancel . Tried several times to phone BYO jet in March, had the standard "if you are not travelling in the next 48 hrs " message. We had a message from Emirates telling us the money had been refunded to our travel agent. There was NO way of contacting BYO jet other than a request for refund form . They offered a full credit voucher or rebooking. No option of a full refund at the time. Opted for credit voucher. Then the proverbial hit the fan and everyone realised that life was not getting back to normal anytime soon. Decided to push for a full refund. After 12 months we were finally able to phone. Were amazed to only be waiting 20 minutes for a reply. Were digging in for a day of waiting, but got a pleasant girl on the phone who listened to our story. Agreed to the full refund and it was in our account within 5 days . Only 12 months late. 

so you got your money back but still not happy. I don't think Emirates or agent stuffed up. The govt closed the borders for no good reason. I wouldn't have given you anything back. I would have said he's a credit or flights later, take it or leave it.

28 Apr 2021

Total posts 2

why? My flights were cancelled so i was entitled to a refund for goods not received, you are joking or a troll

nope. Entitled to nothing. Airlines didn't want to cancel flights. Govt made them.

29 Jan 2015

Total posts 41

Surely you guys have basic contract law in Australia?  you paid a provider for a service not received.  had you notvtaken that flight on that date, you would have lost your money. so equity in law means as that flight was not provided on that date you are entitled to your money back ( at least).

Take it to court for breach of contract.  Get judgment in your favour.  Which you wil unless there's even more wrong with co sumer rights in Australia.  When they don't pay up, which you should ask the court to state date for, send in the bailiffs to impound by and re-sell their computers, their airplane, their office furniture.  Which you'll have to impound and sell quite a lot of, given lower secondhand values for things plus they also owe you all ypur costs and bailiffs's fees so more property is taken by your bailiffs.

Why is nobody just using basic law to do this?

when a business has no assets, like many airlines what do you do ? Sell the desks, computers ? Yep, they are worth a fortune.

Even if they part own of some aircraft, ATO, banks who probably own some of the aircraft would have 1st chop at any funds. Doesn't matter what Australian consumer law says & if airline is foreign ?

29 Jan 2015

Total posts 41

@regularflyer that's what bailiffs are for.  It's who gets in and grabs sufficient stuff to resell to get back.all costs (including costs of bringing action), that gets.

I'm really surprised Australians are taking these poor consumer laws.  But contract law is available to you and surely enforceable.  Very, very surprised modern Australians don't have the b*11s which seems to be what your comment is implying and I don't believe it for a minute.


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