Yahoo Finance Jetstar hit with $1.95 MILLION fine for lying about refunds
Jetstar will have to cough up $1.95 million in penalties after the Federal Court found the low-cost carrier lied about flight refunds.
The Court has found that between April 2017 and March 2018, Jetstar made false or misleading representations on its website about the rights and remedies afforded to consumers under the Australian Consumer Law (ACL).
According to the competition watchdog ACCC, Jetstar lied or misled consumers on its website with statements claiming some fares were not refundable and customers could only get a refund if they bought a more expensive fare.
Jetstar breached ACL by claiming consumer guarantee rights under the ACL didn’t apply to Jetstar services, and that they had limited obligation to provide refunds or replacement flights.
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But no flight is exempt from the ACL’s consumer guarantees, said ACCC chair Rod Sims.
“Jetstar’s representations were false or misleading because all flights come with automatic consumer guarantees that cannot be excluded, restricted or modified, no matter how cheap the fare,” Sims said.
“If a flight is cancelled or significantly delayed, passengers may be entitled to a refund under the consumer guarantees.”
If services aren’t supplied within a reasonable time, all consumers have the right to a remedy, such as a refund, he added.
“Businesses simply cannot make blanket ‘no refunds’ statements, because they can mislead consumers into thinking they can never get a refund under any circumstances," Mr Sims said.
“This decision is a warning to all businesses that misleading consumers about their rights breaches the Australian Consumer Law, and doing so may result in multi-million dollar penalties.”
Jetstar has also committed to fixing its policies and practices to make sure they are in line with the ACL, as well as reviewing its compliance programs, websites and booking systems.
Jetstar will also review consumer complaints relating to flight delays or cancellations between 10 April 2017 to 13 March 2018 and will provide refunds or other remedies to customers that would’ve been entitled to compensation.
A Jetstar spokesperson told Yahoo Finance it was “never [their] intention to mislead customers”.
“We take our obligations under Australian Consumer Law seriously and it was never our intention to mislead customers about the circumstances in which they could claim refunds,” the spokesperson said.
“We worked closely with the ACCC during its review and in July last year made changes to our website and our conditions of carriage, to make sure it’s clear when customers are eligible for a refund.”
The ACCC took Jetstar to court in December 2018.
But it wasn’t the only airline to cop scrutiny from the watchdog: Tigerair, Qantas and Virgin Australia also agreed to review their refund policies.
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