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Australia's consumer rights watchdog has called out budget airline Jetstar for claiming certain guarantees under Australian Consumer Law (ACL) did not apply to its flight services and that some fares were non-refundable.
The Australian Competition and Consumer Commission (ACCC) has instituted proceedings against Jetstar for making false or misleading representations.
"No matter how cheap the fares are, airlines cannot make blanket statements to consumers that flights are non-refundable," ACCC chair Rod Sims said.
The announcement yesterday came after Jetstar, Tigerair, Qantas and Virgin Australia committed to ensuring their refund policies and practices comply with consumer guarantee obligations under the law.
The ACCC and Jetstar have jointly submitted to the Federal Court that Jetstar should be ordered to pay a $1.95 million penalty, and to make a contribution to the ACCC's costs.
The Federal Court will now decide whether the proposed penalties and other orders sought are appropriate.
The regulator highlighted services such as flights come with automatic consumer guarantees, and these rights cannot be excluded, restricted or modified.
If a flight is cancelled or significantly delayed, passengers may be entitled to a refund under the consumer guarantees, which give consumers a right to a remedy if services are not supplied within a reasonable time.
"It's frustrating for travellers when they have difficulty getting a refund for flights when they are entitled to one," Sims said.
"This 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."
While concrete action has been announced regarding Jetstar, the watchdog has accepted court-enforceable undertakings from Tigerair, Qantas and Virgin Australia too, in which each has committed to reviewing their refund policies, compliance programs, websites and booking systems to address the ACCC's concerns.
The regulator claims improvements have already been made to these airlines' websites, policies and procedures.
Jetstar, Qantas and Virgin Australia will also review consumer complaints made in a specified time period, and offer refunds or other remedies to consumers who were entitled to these remedies originally but did not receive them.
Affected passengers will be contacted by these airlines and offered a remedy in accordance with their rights under the ACL.
All four airlines will also create Australian Consumer Law page on their websites to provide a clear and concise statement of passengers' consumer guarantee rights and the steps they can take to seek a remedy where the airline's flights are significantly delayed or cancelled.
"Jetstar, Tigerair, Qantas and Virgin Australia have provided substantial undertakings to the ACCC and in doing so have committed to doing the right thing by their passengers in relation to refunds and other remedies under the consumer guarantees," Sims said.
"Passengers will now be offered refunds or other remedies by these airlines when there has been a failure to supply the service within a reasonable time."
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