Aviation

Jetstar hit with $1.95m fine for misleading refund claims

The Federal Court has ordered Jetstar Airways to pay $1.95 million in penalties for making false or misleading representations about consumer guarantee rights under the Australian Consumer Law (ACL).

The court found that between April 2017 and March 2018, the budget airline made false or misleading representations on its website about the rights and remedies available to consumers under the ACL.

Jetstar made false or misleading statements on its website that some fares were not refundable, and that consumers could only get a refund if they purchased a more expensive fare.

The court also found that Jetstar’s terms and conditions breached the ACL by claiming that consumer guarantee rights under the ACL did not apply to its flight services, and that the airline’s obligation to provide refunds or replacement flights was limited.

The Australian Competition & Consumer Commission (ACCC) instituted proceedings against Jetstar in December 2018 for breaches of the ACL.

At that time, Jetstar admitted liability and the ACCC and Jetstar made joint submissions to the Federal Court that Jetstar should be ordered to pay a $1.95 million penalty, and to make a contribution to the ACCC’s costs.

Jetstar also gave the ACCC a court-enforceable undertaking, committing to amend its policies and practices to ensure that they are consistent with the ACL.

In its undertaking, Jetstar has also committed to reviewing its compliance programs, websites and booking systems to address the ACCC’s concerns, and has already made a number of improvements to its websites and policies.

Jetstar has also undertaken to review consumer complaints concerning flight delays or cancellations during the period between 10 April 2017 to 13 March 2018, and will offer refunds or other remedies to consumers that would have been entitled to those remedies.

ACCC chair Rod Sims said: “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.

“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.

“Businesses simply cannot make blanket ‘no refunds’ statements, because they can mislead consumers into thinking they can never get a refund under any circumstances.

“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.”

In a statement to Travel Weekly, a Jetstar spokesperson said: “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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