Finance Consumer Calls to strengthen travel refund rights before borders reopen
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Calls to strengthen travel refund rights before borders reopen

Normal refund rights are unlikely to apply if a trip is cancelled due to COVID restrictions.
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Australians keen to escape their living rooms as borders reopen stand to lose thousands of dollars on travel expenses if things go wrong.

Despite countless stories of travellers losing their savings after trip operators cancelled their holidays and refused to give them refunds, advocates said the federal government has yet to make any progress on strengthening refund rights for consumers.

As it stands, travellers have no legal right to a refund if their flight or accommodation is suddenly cancelled as a result of government-mandated lockdowns – unless otherwise stipulated in their booking’s terms and conditions.

Choice director of campaigns Erin Turner said the weak protections meant Australians were “rightly nervous” about making travel bookings after many were “burnt” over the past two years.

She said consumers had even run into issues with travel credits and vouchers.

“Right now in Australia, you have more rights with a gift card than you do with thousands of dollars in travel credits,” Ms Turner said.

“We have to fix this to give people the confidence to book travel … the travel industry isn’t going to recover in the way it needs to [until we do].”

Fewer than one in five of the more than 4000 people Choice surveyed this year said they had received a full refund after their trip was cancelled.

Consumer advocate Adam Glezer, who set up the website consumerchampion.com.au, said it was “time for the government to step up and protect consumers”.

Mr Glezer said politicians should pass laws that guarantee consumers an automatic refund if they are unable to travel for reasons beyond their control, such as when a government imposes a snap lockdown.

“If you can’t take the flight due to a lockdown and the terms and conditions do not allow for a refund, you have no legal right to get your money back,” he said.

“This kind of issue can affect anyone, any time.”

Mr Glezer said in the US, all airlines were legally obliged to refund fares for cancelled flights, regardless of the reason for cancellation.

Nothing doing in Canberra

Liberal MP Kevin Andrews put forward a parliamentary motion in May calling for four major changes to Australian consumer law.

The motion called on 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.”

But no meaningful action has been taken since then.

Minister for Tourism Michael Sukkar declined to comment on the steps his government had taken to strengthen travel refund rights.

Instead, Mr Sukkar said the Australian Competition and Consumer Commission was “engaging with travel businesses in relation to their approach to travel cancellations in response to COVID-19”.

“This includes engaging with businesses to ensure they are not misrepresenting consumers’ rights to a refund or other remedy,” he said.

Australian Federation of Travel Agents chair Tom Manwaring said the travel industry would find it easier to reimburse customers once more people were travelling and the tills were ringing again.

He said the pandemic had reversed the industry’s cash flow and forced it to pay out almost $8 billion worth of refunds in just two years.

Once the pandemic is over, he believes the travel refund issue will “cease to exist”.

The federal government has said it will start reopening the international border from November 1.