Australia’s consumer watchdog has warned the travel sector it must honor the refund policies that existed at the time of bookings, after widespread complaints that operators were creating new conditions and applying them retrospectively during the Covid-19 crisis.
The pandemic has placed the travel sector in a deeply difficult position, forcing widespread cancellations and throwing businesses into financial turmoil.
As they fight to survive, key players in the Australian market have drawn the anger of customers by suddenly changing their refund policy and applying it to previous bookings to withhold refunds.
The Australian Competition and Consumer Commission said it was “aware of concerns from consumers over the retrospective changes implemented by certain travel agencies”.
In a statement to Guardian Australia, it warned: “Travel providers must honor the terms and conditions agreed to at the time the consumer purchased their flights, cruises, tours or accommodation.
“Informing consumers that they have no right to a refund when in fact they do is likely to constitute misleading conduct in breach of the Australian consumer law.”
The situation is not unique to Australia. Research has suggested all the biggest airlines in the UK and many big holiday companies have been systematically breaking the law by denying timely refunds to customers for travel cancelled during the pandemic.
The industry in the UK is also fighting for survival and its peak body said the refund rules, if not suspended, would lead to “catastrophic damage to the UK travel industry and widespread consumer detriment”.
Last week, Guardian Australia reported that Topdeck, a major youth travel operator, had announced it was changing its refund policy.
Initially, the company had promised some travelers refunds for cancellations.
But the changed policy meant it was now “offering a credit voucher in order to travel with us in the future, which will not be redeemable for cash refunds”.
One customer was told: “Please note: we are not able to process cash refunds – even if we had previously agreed this.”
Topdeck said offering travel credit was “reasonable” given the circumstances, and in line with ACCC guidance and the industry standard.
“Our current position is not unique and is in line with many other tour operator and travel companies in the present environment,” a spokeswoman said.
Intrepid Travel, an adventure tour company, has also recently changed its refund policy and applied it to past bookings. The company denies it did this to deny customers refunds.
But many Intrepid customers, either through contact with Guardian Australia or on the company’s Facebook page, say the opposite. Some customers say they were initially promised refunds, then subsequently offered only a credit when the company changed its policy.
“This is our offer given the current environment,” one customer, Declan Gallagher, was told. “Should you wish for this to be reviewed further, we ask for you to contact us after the 31st of July, 2020.”
Intrepid said it was still working with individual customers who had ongoing concerns.
The industry says many customers are happy with travel credit. But some customers who have contacted Guardian Australia say credit is useless because the pandemic has left them without jobs, fearful of the health risks of future travel, or concerned their travel provider will go bust.