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Jetstar taken to court for misleading customers about refunds

Image: Getty
  • Jetstar has been taken to court by the consumer watchdog over its refund policy.
  • Qantas, Tigerair, Virgin and Jetstar have all agreed to review their refund policies.
  • Claims that passengers aren’t entitled to refunds, must pay an “admin fee” to receive refunds, or are only eligible for short-term credits have been hauled over the coals.

Budget airline Jetstar has been taken to the Federal Court over claims its refund policy misled customers.

The Australian Competition and Consumer Commission (ACCC) described certain elements of Jetstar’s refund policies as false or misleading.

Jetstar admitted to telling customers that some fares were not refundable and that passengers were only entitled to a refund if they bought a more expensive ticket.

“No matter how cheap the fares are, airlines cannot make blanket statements to consumers that flights are non-refundable,” the chair of the Australian Competition and Consumer Commission (ACCC) Rod Sims said.

“It’s frustrating for travellers when they have difficulty getting a refund for flights when they are entitled to one. This case is important not only for holding Jetstar to account, but sending a wider message that businesses cannot exclude or limit consumers’ rights under the Australian Consumer Law,” he added.

The ACCC and Jetstar have jointly submitted that Jetstar should pay a $1.95 million penalty as well as make a contribution to the ACCC’s costs.

However, the Federal Court will decide whether this outcome is appropriate.

Flights come with automatic guarantees that if a flight is cancelled or significantly delayed, the passenger could be entitled to a refund.

Tigerair, Qantas and Virgin Australia also commit to reviewing refund policies

Jetstar isn’t the only airline receiving regulator scrutiny.

Tigerair, Qantas and Virgin Australia have agreed to review their refund policies after the ACCC expressed concern they had also breached consumer law.

The three airlines and Jetstar will review the information their websites provide about refunds in the event of serious delays or cancellations.

Customers affected by dodgy information will receive compensation.

“Airlines cannot make blanket statements that flights are non-refundable or charge consumers a fee to get a refund when they are entitled to one free of charge under the Australian Consumer Law,” Sims said.

What are they reviewing?

Qantas agreed it may have led customers into believing that refunds were not available for its ‘Red e-deal’ fares. Australia’s premier airline will review certain complaints and offer refunds where appropriate.

Virgin also acknowledged its statements that refunds were not available for its ‘International Short-haul’ and ‘Domestic Getaway’ fares. Virgin also told customers they could only receive a credit that was valid for 12 months as a remedy. It will also review complaints and potentially offer refunds.

Tigerair noted the ACCC’s concerns over representations that customers need to pay a “refund admin fee” to receive a refund. The budget airline also told consumers they could only receive a credit which was valid for six months.

In addition to its potential $1.95 million penalty, Jetstar will review complaints and possibly offer refunds.

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