ACCC sues Airbnb for allegedly misleading Australian customers about booking costs

ACCC sues Airbnb for allegedly misleading Australian customers about booking costs

Photo by Ivan Radic (via Flickr)

The nation’s consumer watchdog has announced it is taking San Francisco-based holiday home rental company Airbnb to the Federal Court, alleging the platform misled thousands of Australian consumers about accommodation prices.

The Australian Competition and Consumer Commission (ACCC) alleges that between January 2018 and August 2021, Airbnb misled consumers by displaying only a dollar sign for accommodation costs on its website or mobile app without clarifying prices were in US dollars and not the local currency.

The regulator also alleges Airbnb engaged in further misleading or deceptive conduct by telling consumers the prices had been displayed in US dollars because they selected the currency, even though it was often not the case.

According to the ACCC, Airbnb received thousands of consumer complaints about being charged more than the displayed price, but did not amend the booking platform until after the watchdog raised the issue.

“We allege that Airbnb’s misleading conduct meant that consumers were deprived of the opportunity to make an informed choice about whether, and at what price, to book their holiday accommodation on the Airbnb platform,” ACCC Chair Gina Cass-Gottlieb said.

“In addition to paying higher prices than expected, some consumers who were charged in US dollars also found themselves further out of pocket through currency conversion fees charged by their credit card provider.

“Airbnb did not compensate many consumers who complained about this conduct, and so we will be arguing that the court should order Airbnb to compensate people who were misled about the price of their accommodation.”

During the almost four-year period the ACCC alleges Airbnb was misleading Australian consumers, the average Australian to US dollar exchange rate was approximately $0.72 USD.

At that rate, an Australian consumer who believed they were paying AUD$500 for their booking would end up paying almost AUD$700 before any foreign currency conversion fees.

The ACCC noted that on some occasions Airbnb referred to the price as ‘USD’ in small font on the last page of the booking process.

“This happened only after the platform had already displayed numerous dollar amounts on earlier pages, without nearby reference to US dollars, and after the consumer had clicked to ‘reserve’ their accommodation,” the ACCC said.

The regulator also said it expected all businesses to regularly review and appropriately address issues revealed by the consumer complaints they receive.

“By taking this action, we are stating very clearly that digital platforms like Airbnb need to ensure the accuracy of all statements that may affect consumers’ purchasing decisions,” Cass-Gottlieb said.

The ACCC is seeking declarations, injunctions, pecuniary penalties, orders for the compensation for affected consumers, costs, and other orders.

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