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STA Travel in court for allegedly misleading consumers

March 29, 2019 Headline News No Comments Email Email

The Australian Competition and Consumer Commission (ACCC) has instituted proceedings in the Federal Court against STA Travel Pty Ltd for allegedly making false or misleading claims in relation to its MultiFLEX Pass product.

STA Travel’s MultiFLEX Pass is marketed as an airfare add-on that, if purchased, purportedly allows the consumer to change the dates of their flights without paying certain, or any, fees or charges.

The ACCC alleges that, since September 2011, STA Travel has misled consumers by representing in advertisements that a customer who changed the date of their flight after purchasing a MultiFLEX Pass would not pay any fees or charges, or would only be charged the difference in the cost of the airfare and applicable taxes.

In fact, it is alleged STA Travel charged many consumers hidden commissions and other fees on top of the difference in airfare and taxes, and in some cases even where there was no difference in airfare and taxes.

“We were particularly concerned about STA Travel’s advertisements because they explicitly said MultiFLEX Pass consumers would avoid fees for date changes,” ACCC Commissioner Sarah Court said.

“Some advertisements, for example, said that the MultiFLEX Pass allowed consumers to purchase date changes ‘upfront’, to ‘prepay’ for date changes, or to make ‘fee free’ or ‘no fee’ date changes.”

“However, we allege that some consumers were paying STA Travel hundreds of dollars in hidden commissions and other fees that they were never told about,” Court said.

“Many consumers who thought they were being prudent by purchasing an add-on to avoid high fees were instead worse off.”

ACCC issued this illustration along with its statement on STA

The ACCC alleges that STA Travel has generated revenue of over AUD 12 million from the sale of  MultiFLEX Passes since 2011, and that nearly two thirds of the consumers who used their MultiFLEX Pass to change flights were charged additional commissions or other fees. Additional commissions or other fees totalling more than AUD 1 million were collected by STA Travel since 2011 from consumers using a MultiFLEX Pass to make date changes.

The ACCC is seeking penalties, injunctions, costs, and other orders against STA Travel.

The background, according to a statement issued by the ACCC, is:

STA Travel sold three types of MultiFLEX Passes since at least September 2011:

  • the ‘ONEFlex Pass’—costing AUD 49 and allowing one flight change;
  • the ‘3 Change Pass’ or ‘Multiflex Pass’—costing AUD 99 and allowing three flight changes; and
  • the ‘Unlimited’ or ‘Ultimate’ Change Pass—costing AUD 149 and allowing unlimited flight changes.

Edited by Peter Needham

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