Finance Consumer Calls for reform as consumers denied refunds for trips cancelled due to COVID
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Calls for reform as consumers denied refunds for trips cancelled due to COVID

Advocates are pushing for stronger refund rights after consumers were denied them during the pandemic.
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Edilia Ford, 63, and her husband Geofrey, 67, spent years saving up for a trip of a lifetime to usher in their retirement.

They booked an 18-day trip to Europe that took in seven countries and included seven days at sea on the fifth-largest cruise ship in the world.

And they also organised a holiday to Alaska and Canada starting two months after their expected return.

The European trip was to begin in the Hungarian capital of Budapest on March 10, 2020.

But what was meant to be the holiday of their dreams soon became a nightmare that haunts them to this day.

Stuck in Budapest

Before departing for Hungary, the Fords were worried their trip was unlikely to go ahead.

Although Australia had yet to experience its first lockdown, Italy was already reporting thousands of new cases of COVID-19 and hundreds of daily deaths.

And the Fords’ cruise ship was scheduled to depart from Rome on March 17.

Hours after Italian Prime Minister Giuseppe Conte announced a national lockdown on March 10 (Australia time), the travel agency through which the Fords booked their trip, TripADeal, assured the couple via email that there was no impediment to travel to Italy.

Later that day, just hours after the Australian government’s Smartraveller service had advised Australians to “reconsider your need to travel to Italy”, the Fords successfully boarded their flight from Sydney to Budapest.

But no sooner had they touched down than they received word from TripADeal that their seven-day cruise had been cancelled.

“Everybody lost their minds,” Ms Ford said.

The travel agency emailed them about 6pm on March 11 to let them know Costa Cruise Line had cancelled their cruise and would offer them a credit note “to be used towards a future Costa cruise”.

TripADeal sent out a revised travel itinerary and said they planned to book a return flight for the Fords and their fellow travel companions from Munich on March 18.

But the Fords made their own way home on March 15 after paying $3315.73 for flights home from Budapest, which was also subject to COVID restrictions.

It was just the beginning of a protracted ordeal that has since forced Ms Ford to seek professional help for issues with her mental health.

Edilia Ford and her husband Geofrey, who suffered a serious spinal injury and went through a 10-hour surgery in April, are still waiting for a full refund.

Including the cost of their flight home, the Fords spent a total of $11,160 on their trip to Europe and about $14,000 on their cancelled North American adventure.

Yet more than 15 months later, and despite both of their trips having been cancelled through no fault of their own, they have still yet to receive a full refund.

TripADeal’s best offer was a refund worth $2263.54 and a credit note worth $3040.30 – an option that would leave the Fords $5856.16 in the red and one they have not yet accepted.

And Webjet Exclusives, the company through which they booked the North American trip, ended up paying out $13,000 after withholding an initial deposit of $998.

Ms Ford, who took her complaint with TripADeal to NCAT but lost her case, said this wasn’t good enough and highlighted how Australian travellers had far fewer rights than consumers in any other industry.

“No one should be standing where I am today,” she said.

“The system has failed me. And it’s failed so many other people.”

TripADeal sent excerpts of Ms Ford’s NCAT case to The New Daily but declined to comment further when asked why the company had not provided a full refund to Ms Ford.

NCAT found TripADeal had complied with its contract with Ms Ford, “had not acted negligently, nor breached any provisions of the [Australian Consumer Law]”.

travel refunds Kevin Andrews parliament
Kevin Andrews has put forward a parliamentary motion calling for reform of the travel industry. Photo: AAP

The push for change

Ms Ford is one of almost 4000 Australians to have joined a Facebook group set up by consumer advocate Adam Glezer.

Called Travel Industry Issues – The Need for Change for Australiansthe group provides a forum for disaffected consumers to share advice on claiming refunds and has been advocating for stronger refund rights for Australians.

The big problem many face is that normal consumer guarantee provisions do not apply if a trip is cancelled due to government restrictions – rather than by a travel company – which means the only right to a refund that people have is that which is outlined in their travel company’s terms and conditions.

“There are some companies that have been doing the moral thing, like some airlines, with refunds and the like,” Mr Glezer said.

“But there are a lot out there that have just been offering credit. And the reality of it is, as it stands right now under Australian consumer law, they’ve got the right to do that.”

Mr Glezer is consequently calling on the federal government to change the law so that consumers are entitled to a refund if a trip is cancelled “due to situations outside of human control”.

“The consumer has paid for a service in good faith,” he told The New Daily, when asked why credit notes were insufficient.

“To me, it makes no sense that they should not be entitled to a full refund. They have not received what they have paid for – it’s as simple as that.”

Rumblings in Canberra

Mr Glezer’s calls have been heard in Canberra, where Liberal MP Kevin Andrews has put forward a parliamentary motion calling for four major changes to Australian consumer law.

Mr Andrews wants Australian governments to enact legislation that:

  • “Provides consumers with a right to a refund if the service they paid for hasn’t been fulfilled due to situations outside of human control
  • “Establishes mandatory trust accounts for all travel agents, including online travel agents
  • “Provides for transparent fee for service for all travel agents with no hidden costs
  • “Ensures that supplier terms and conditions are provided to customers by travel agents.”

Mr Andrews told The New Daily he had been contacted by many constituents unable to claim refunds and was often surprised by the amount of money some people had lost.

“We often think of travel as being a $99 airfare from Melbourne to Sydney, but people are spending $40,000 or $50,000 on major international travel and accommodation,” he said.

The parliamentary motion enjoyed bipartisan support and was seconded by Labor MP Mike Freelander.

Dr Freelander told The New Daily travel agents were also doing it tough and required more government support.

He said in the current economic environment it was unfeasible to ask independent travel agents to stump up extra cash and the federal government would consequently have to intervene.

“I don’t think it’s going to cost a lot of money,” he said.

“It needs a small amount of money to help people who are struggling, and I think that needs to be thought through a bit better.”

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