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Omitting to mention compulsory charges of up to $54 per customer in minimum price messaging and confirming hundreds bookings that had not actually been paid are two of the allegations levelled against a Webjet Group (ASX: WJL) subsidiary by the consumer watchdog.
The Australian Competition and Consumer Commission (ACCC) has commenced proceedings in the Federal Court against online travel booking site Webjet Marketing Pty Ltd for allegedly making false and misleading representations to consumers about flight prices and bookings over a five-year period.
The ACCC alleges Webjet breached the Australian Consumer Law when it made statements on its app, in marketing emails, on social media and on its website about the minimum price of airfares which omitted compulsory fees charged by Webjet.
The ACCC alleges that statements, made between November 2018 and November 2023, would state "flights from $x" but this minimum level did not include compulsory "Webjet servicing fee" and "booking price guarantee" fee that ranged from $34.90 to $54.90 per booking
The regulator adds these fees were not disclosed in Webjet’s social media posts, although the website, app and most promotional emails did contain the information, albeit towards the bottom of the relevant screen in fine print and in a way that was not "not sufficiently clear or prominent", according to the ACCC.
"We know how much Australian consumers value air travel to stay connected for work, leisure or to visit family," says ACCC Chair Gina Cass-Gottlieb .
"During this time of cost pressures, many consumers are carefully considering travel arrangements and seeking to save money.
"A statement about the lowest price must be a true minimum price, not a price subject to further fees and charges before a booking can be made."
Webjet is also alleged to have breached consumer law by displaying a confirmation page online and sending a confirmation email after taking payment for a completed flight booking when in fact, in respect of 382 bookings, it had not booked the flight with the airline. The practice is alleged to have occurred between 1 November 2018 and 25 June 2024.
In these cases, Webjet later allegedly sought additional payment from the consumers to complete the booking, or offered the consumer a refund for the flight, despite having earlier confirmed the booking.
Some consumers may have made and paid for other travel arrangements on the basis of the confirmation so may have had to choose between paying more money or cancelling other arrangements at a potential loss.
“We are very concerned about this alleged conduct by Webjet, which represented to consumers that their flight booking had been confirmed and left some consumers in the position of having to pay more to later complete the booking,” Cass-Gottlieb says.
“The ACCC is currently prioritising consumer and competition issues in the aviation sector as well as conduct in the digital economy.
"We remind all businesses, whether they are online retailers or bricks and mortar stores, that they need to comply with the Australian Consumer Law by not misleading consumers and displaying prices clearly, including hidden fees and surcharges.”
The ACCC is seeking pecuniary penalties, declarations, injunctions, consumer redress, costs and other orders.
Webjet, which recently reported its first results as a standalone entity after splitting off from the B2B side of its former incarnation, says in a statement that it is "confident there is no widespread customer dissatisfaction with our offering, disclosure, service or pricing".
"Webjet Marketing has fully cooperated with the ACCC prior to the issuance of these proceedings and has already voluntarily and proactively undertaken a number of steps to further improve its disclosure of pricing and fees," the company states.
"So far as Webjet Marketing is aware, the ACCC concerns do not relate to its current fee disclosure and pricing practices."
The group says it takes compliance with Australian Consumer Law extremely seriously and has "always prided itself on its high levels of trust with all stakeholders".
"Webjet Marketing has always sought to provide great value and service to its customers, helping people compare flight prices and travel products transparently at a time where domestic flight prices are soaring due to a lack of competition," the group states.
"Millions of customers have chosen to book through Webjet Marketing during the period in question and we have very rarely been contacted by customers complaining about our disclosure of fees."
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