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This article highlights the bad business practices that some travel companies have adopted during the COVID-19 pandemic. They appear to be avoiding paying cash refunds when bookings are cancelled due to COVID-19. Then they are making it virtually impossible to use the travel credits they offer or placing restrictions on their use so they are worth much less than the original travel. Please contact us if you have had experiences with using Travel Credits (good or bad) and if bad, are interested in progressing your claim by sending a Letter of Demand or alternatively to be part of a potential class action.
1️⃣ Has your travel has been cancelled due to COVID-19?
After having to cancel travel plans due to COVID-19 you have more than likely discovered that your travel provider has a blanket policy NOT to provide a cash refund.
It appears that such a blanket policy is being implemented no matter how long before the travel you have cancelled, and even if cancellation is beyond either parties control (due to a Government COVID-19 lockdown, travel restriction, border closure or regulation).
This approach might be due to the fact that your travel provider is actually an intermediary and therefore must abide by other travel company policies, but this is not determinative.
As an alternative to a cash refund you are offered a travel credit.
The problem is that all travel credits are not equal, and it appears many include impossible restrictions that can frustrate your attempts to use them and expire worthless.
2️⃣ Has your Travel Provider made it impossible to use your Travel Credits? or offered Travel Credits worth much less than a cash refund?
Does the following experience attempting to use travel credits sound familiar …
At first being provided a travel credit seems acceptable.
At least you have not had to consult a lawyer and you are being provided with some benefit which you assume will be equivalent to the value of the price you originally paid for the travel.
Unfortunately, it appears that in some cases the conditions which are being attached to the redemption of the travel credits effectively mean that you will could end up much worse off than you would have been if you had your cash refunded.
Here are some examples:
🔎 Expedia # 1 ➲ If you don't use the travel credit in full, any balance is forfeited
Expedia Inc. have advised that in your specific circumstances the travel credit offered by the relevant airline is structured in such a way that it can only be used for one travel booking.
This means that any excess credit will be forfeited and effectively lost.
In this example, the airline involved was Virgin Australia which no longer operated internationally at the time.
Expedia Inc. advised that the most expensive domestic flight was less than a quarter of the cost of the original international flight.
If the travel credit was used for a domestic flight, the financial loss to the consumer would be substantial due to the automatic forfeiture of the balance of the travel credit.
Expedia Inc. explained that the tight restrictions have been effectively caused by the flow-on effects of the administration of Virgin Australia.
The actual situation is not known (as the terms of the travel credit issued by Virgin Australia were not provided to the consumer) though it does makes sense that special arrangements were made regarding such matters when the new owners of Virgin Australia took over the airline from its pending collapse.
It is noted that in discussions with a customer who was dealing directly with Virgin Australia (and had purchased tickets prior to Virgin's administration) they advised that they were able to use the entire amount of their travel credit with no amount being forfeited.
🔎 Expedia # 2 ➲ Disconnect your call before you can redeem your travel credit
In this example, the travel credit for the cancelled booking related to more than 1 person.
Does the following experience sound familiar?
With Expedia Inc., you cannot claim your travel credit online, they can only be redeemed by calling the Expedia Inc. customer service centre.
After waiting nearly an hour on the phone an Expedia Inc. customer service representative answers your call.
Expedia Inc. advised that the travel credit could only be used to book a flight in exactly the same names (this effectively means the travel credit cannot be transferred between family members).
The Expedia Inc. customer service representative asks for your phone number so they can return your call if you get disconnected.
You get disconnected (at exactly the 1 hour call mark - it seems the system is designed to drop calls automatically after 1 hour).
The Expedia Inc. customer service representative does not return your call.
You call the Expedia Inc. customer service centre again and wait almost another hour for a different Expedia Inc. customer service representative to answer your call.
The above process repeats, and you get disconnected again right on the 1 hour call mark.
You give up as you have better things to do than to spend your entire weekend on hold only to have your call automatically disconnected before you can redeem your travel credit.
As using the travel credit represents real money, you try one last time.
This time you ask to make a formal complaint as your patience has worn thin.
You are told to send an email.. no email address is provided.. you are again promptly disconnected right on the 1 hour call mark.
You are emailed a customer satisfaction survey.
No-one returns any of your calls from the Expedia Inc. customer service centre.
You cannot determine any other way to redeem your travel credit.
The end result is that if you don't take further steps to enforce your legal rights then your travel credit may expire effectively worthless.
In order to attempt to avoid such a result we strongly recommend you read this article in its entirety + contact our legal team to discuss your options.
Some relevant extracts from the article have been copied below.
A consumer advocacy group has lodged a formal complaint with the Australian Competition and Consumer Commission (ACCC) about Qantas's flight credit policy.
Key points:
➲ Choice says the Qantas flight credit policy may have unfair contract terms
➲ Qantas currently holds $1.4 billion in flight credits
➲ The ACCC is investigating the policy and has sought information from consumers
Choice said the airline's flight credits scheme was "unfair and unworkable" and it might involve "potential Unfair Contract Terms and Misleading and Deceptive Conduct".
Choice spokesperson Dean Price said Qantas was placing unreasonable barriers in the way of travellers trying to redeem their credits or get a refund from cancelled travels.
"This includes forcing many people to spend extra money, limits on available flights, problems with online services, unfair expiry dates, and long wait times in their call centres," Mr Price said.
Others …
Please let us know about your experiences with Travel Credits (both good and bad) so we can share these with the public.
4️⃣ What are your legal rights when your travel is cancelled due to COVID-19?
Each situation will vary depending upon its own circumstances, however the following considerations will help you to begin the process of understanding your legal rights and potential steps you can take to enforce them.
5️⃣ ACCC Best Practice Guide for the Travel Industry (COVID-19 related travel cancellations)
First check to see whether your travel provider is implementing best practices, and note where they are falling short (if applicable)!
The ACCC + Australian Consumer Law (ACL) Regulators released a best practice guide for the Travel Industry in July 2020 for COVID-19 related travel cancellations.
If you have paid for the travel by credit card or PayPal then one avenue to pursue in the first instance is a claim via your Credit Card company / PayPal to have your account credited due to the fact the product or service has not been delivered.
You will need to take prompt action to maximise your chances of success, and please be aware that strict time limits apply.
7️⃣ Standard Terms & Conditions
Failing a refund via your payment service, the starting point is to read the standard terms & conditions of your booking and of the travel credit itself (if that is possible).
Although the standard terms & conditions may specify that no cash refund is available, or restrict any travel credit redemption this is not the end of the matter.
Where unforeseen events such as the COVID-19 pandemic make it impossible to perform the contract, what you are looking for in the standard terms & conditions is a Force Majeure Clause which will specify what the parties (yourself and the travel provider have agreed) will happen in such a situation.
Don't believe everything you read!
It is also important to note that just because the standard terms & conditions specify a certain outcome it does not automatically mean that the outcome is enforceable.
When assessed by a Tribunal/Court the standard terms & conditions could be found to be Unfair Contract Terms or constitute Misleading & Deceptive Conduct and therefore be void and unenforceable.
It is also possible that Australian Consumer Guarantees or local NSW legislation such the the Frustrated Contracts Act 1978 (NSW) (refer discussion below) could be applied to change the outcome.
The Australian Consumer Guarantees are the promises +/or assurances that automatically apply (imposed as protection for consumers by Australian Consumer Law) to the sale of products and services to consumers in Australia.
Australian Consumer Guarantees apply regardless of anything the seller states to the contrary, including their standard terms + conditions, or warnings on their website or the place of purchase of the product or service.
Unfortunately where the root cause of the problem (cancelled flight, etc.) relates to a government COVID-19 policy or restriction (such an event is outside of the control of your travel provider).
In such a scenario, there may be a gap in the ACL Consumer Protections (for example, where they haven't cancelled the flight, the government has) which complicates the enforcement of the ACL Consumer Guarantees.
Nevertheless, you should still try your best to waive the flag of ACL Consumer Guarantees as this may still assist with negotiating a fairer outcome.
Who is a Consumer?
From 1 July, 2021:
👨💻 A consumer includes any purchaser (including a business) where the purchase amount is less than a monetary threshold of $100,000 (previously the monetary threshold was $40,000); or
🏡 Consumers of goods or services (for any price) if the goods or services are of a kind ordinarily purchased for personal, domestic or household use; or
🚚 A vehicle or trailer purchased primarily for use in the transport of goods on public roads.
Scope of Protection
➲ Bundled products and services;
➲ Gifts with proof of purchase;
➲ Sale items;
➲ Online products and services bought from Australian businesses; and
➲ Second-hand products from businesses, taking into account age and condition.
Exceptions do apply.
Consumer Rights
If a business fails to deliver any of these guarantees, consumers are granted the following legal rights:
By entering your Flight Departure + Destination you can check your compensation rights online 24/7.
Source: Airhelp.com
AirHelp has helped over 16 million happy passengers globally with their claims against the airlines.
By way of full disclosure Blue Ocean Law Group℠ are an affiliate of AirHelp and will be paid a € 16.00 commission per claim made on your behalf.
⚖️ Frustrated Contracts Act 1978 (NSW)
Where your travel provider has no standard terms & conditions, or the standard terms & conditions do not cover the rights of the parties in the event that COVID-19 or something similar frustrates the performance of the contract, then the Frustrated Contracts Act 1978 (NSW) may apply.
FRUSTRATED CONTRACTS ACT 1978 - SECT 7
Promise not performed
(1) Where a promise under a frustrated contract was due to be, but was not, performed before the time of frustration, the promise is discharged except to the extent necessary to support a claim for damages for breach of the promise before the time of frustration.
FRUSTRATED CONTRACTS ACT 1978 - SECT 14
Recovery of money as a debt
A person entitled under Division 1 or 2 to be paid an amount of money by another person may recover the amount from that other person as a debt in a court of competent jurisdiction.
⭐️ Potential Claim or Class Action
Please complete our Incident Report to Support a Legal Claim and contact us if you have had similar experiences are interested in better understanding your legal rights + making a claim or being part of a potential class action where all attempts to amicably resolve the matter have been unsuccessful.
Update: Amicable Outcome Achieved [30 May 2022]
We are pleased to advise that we have recently been able to reach an amicable outcome with Expedia Group for the use of the entire amount of a travel credit (in full disclosure this did involve the payment of a reasonable rebooking fee) that was until recently incapable of being honoured in full due to overly restrictive conditions on redemption.
This result was achieved after sending a Letter of Demand and filing a complaint with NSW Fair Trading.
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