Jetstar forced to pay almost $2M for misleading refund claims

May 30, 2019
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The airline has been forced to pay a whopping $1.95 million in penalties. Source: Getty

Low-fare carrier Jetstar has been forced to pay a whopping $1.95 million in penalties for misleading customers over their right to a refund.

In a ruling delivered today, the Federal Court found that between April 2017 and March 2018 Jetstar Airways made false or misleading representations on its website that some fares were not refundable, and that consumers could only get a refund if they purchased a more expensive fare.

According to the Australian Consumer Law (ACL), if a flight is cancelled or significantly delayed, passengers may be entitled to a refund. This gives consumers a right to a remedy if services aren’t supplied within a reasonable time.

The court found that the airline’s terms and conditions on its website breached the ACL by claiming that consumer guarantee rights under the ACL did not apply to Jetstar’s inflight services – and that the airline’s liability in providing remedies to consumers was limited.

The Australian Competition and Consumer Commission (ACCC) took legal action against Jetstar in December 2018. At the time, the airline admitted to its wrongdoings and the ACCC and Jetstar came to an agreement that the airline should pay a $1.95 million penalty, and contribute to the ACCC’s costs.

“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,” ACCC Chair Rod Sims explained.

“If a flight is cancelled or significantly delayed, passengers may be entitled to a refund under the consumer guarantees. All consumers have the right to a remedy, such as a refund, if services are not supplied within a reasonable time.

“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.”

CHOICE have since responded to the ruling, warning other companies not to mislead customers.

“Don’t play games with consumer rights,” Erin Turner, CHOICE’s director of campaign and communications said.

“This is an important message to all Australian businesses – be honest with Australians about their consumer rights. Every Australian should be informed and empowered to access and use their consumer rights. Practices like claiming that “no refunds” apply when they can are not acceptable in a fair-minded community.”

Meanwhile, a Jetstar spokesperson told Travel at 60: “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.

“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.”

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