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Flight Centre backflip – will waive and refund cancellation fees

May 4, 2020 Headline News 1 Comment Email Email

In a dramatic change of course in the face of mounting pressure, Flight Centre will stop charging customers hundreds of dollars in cancellation fees in order to get a refund for travel cancelled due to the Covid-19 pandemic.

The move follows a public backlash and pressure from the Australian Competition and Consumer Commission (ACCC), which yesterday welcomed Flight Centre’s about-turn on the issue.

Flight Centre will refund thousands of customers who, from 13 March 2020, were charged AUD 300 per person to get a refund for a cancelled international flight or AUD 50 for a domestic flight.

This policy will also apply to cancellations fees charged by Aunt Betty, Travel Associates, Student Universe, Universal Traveller and Jetescape Travel (trading as Byojet Travel), which are part of the Flight Centre group.

The ACCC said that Flight Centre’s decision followed weeks of pressure from the ACCC for Flight Centre “to improve its treatment of customers during Covid-19 travel restrictions”.

The ACCC confirmed its next step would have been court action if Flight Centre did not change its position.

“This announcement will provide faster relief for consumers than would have been likely to have resulted from any court action,” the ACCC said in a statement issued yesterday.

The ACCC added it had received a large number of complaints about Flight Centre’s cancellation fees from consumers via its Infocentre, website, and social media channels.

The Guardian reported one case in which Flight Centre was said to have asked a Gold Coast family to pay AUD 2100 in cancellation fees to process a hotel refund of AUD 1600 for their seven-person Disneyland trip.

ACCC Chair Rod Sims said Flight Centre’s decision not to charge such fees was “a very welcome move… for thousands of customers impacted by Covid-19 travel cancellations”.

“We are continuing to discuss issues in relation to refunds and cancellations with the travel sector, and encourage travel providers to treat consumers fairly in these exceptional circumstances.”

“While we know some consumers are very concerned about getting a refund or credit for their cancelled travel plans, we do ask people to be mindful of the significant impact that this pandemic has had on the travel industry.”

Flight Centre

The ACCC has received more than 6000 complaints from consumers dissatisfied with travel companies’ refund policies and cancellation fees, with thousands more contacting their local state or territory fair trading agencies seeking assistance resolving individual disputes.

While a consumer’s right to a refund during this period will depend on the terms and conditions of the contract entered into with travel provider, the ACCC says many businesses are struggling to process the high number of cancellations.

“We ask consumers to remain patient and be mindful of the significant pressures on businesses at this time and, where possible, contact the business by email or website, rather than by phone,” Mr Sims said.

“These are very complex issues and may take smaller businesses more time to respond.”

For more information on consumer rights and obligations of businesses during Covid-19 please visit accc.gov.au

Edited by Peter Needham

Currently there is "1 comment" on this Article:

  1. Kenton Aldridge says:

    Congratulations to Flight Centre for their drastic action to revert the decision for charging cancellation fees to their clients as this must be a very difficult financial decision. While it would cost FCTG heavily, a wisdom behind this strategic step is well calculated and timely applied as they can see the ultimate benefit in gaining or retaining consumer loyalty which would be huge – making its service model “Pandemic Proof”. And it will certainly go down very well as planned, boosting consumer confidence in one of the nation’s leaders in travel industry. It would also sit well with consumer rights watch dogs over here and in the EU while other travel organizers are still grappling with the challenges of legal elements such as, Regulation 261 and Package Travel Directive (PTD2).

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