REFUNDS FOR CANCELLED TRAVEL PLANS IN LIGHT OF COVID-19 AND GOVERNMENT RESTRICTIONS ON TRAVEL
Unless you have obtained an exemption from the Department of Home Affairs, your overseas travel plans for 2020 will have been derailed by the Covid-19 pandemic.
In an attempt to limit the spread of the virus across Australia, the Commonwealth Government implemented a ban on Australians travelling overseas. There are certain departure travel restriction exemptions which do apply, however, these are strict and specific. You certainly won’t be receiving an exemption if your intended reason for travel is leisure.
Australia’s international border has been closed for some time and will remain closed for the foreseeable future whilst the Covid-19 pandemic continues to threaten the lives of people around the world. There is some suggestion that international travel might even remain restricted for Australians well into 2021. As such, many people are opting to cancel their flights and seek a refund from their chosen airline or travel agent. This means there are a lot of people waiting for refunds which can take many months to process. In light of the current circumstances, obtaining a refund from your airline or travel agent will not always be the most straightforward procedure, and this is not just because of the sheer volume of refund requests choking their administrative mechanisms.
The Australian Consumer Law, in normal circumstances provides guarantees for those who purchase goods and services across Australia. Generally, it is prescribed by law that if an item or service you pay for fails to work or is not provided to you as it was intended to be, essentially failing to meet a consumer guarantee, then you as the consumer are entitled to ask for a repair, refund or replacement. Unfortunately, in light of Covid-19 and the subsequent restrictions which have been put in place by Commonwealth and State Governments, your entitlement to a refund under the Australian Consumer Law may have been impacted by these events which have occurred outside of the control of airlines and travel agents. It is not all bad news however. This does not mean that you will be precluded from obtaining a refund. The ACCC has released advice which indicates that if travel is cancelled due to government restrictions which may impact consumer rights under the consumer guarantees, then in these circumstances consumers may be entitled to a refund under the terms and conditions of their ticket, or consumers may even make a claim under a travel insurance policy. The ACCC has indicated that it expects refunds or other remedies to be issued and has released a statement encouraging businesses to treat consumers fairly.
On the other hand, if you as a consumer decide to opt out of participating in a planned event due to Covid-19 concerns, and this event is still scheduled to occur, such as a domestic flight in some instances, then this decision may be viewed as a “change of mind”. Your right to a refund when you change your mind will be dependent on the terms and conditions of your purchase. It is therefore very important to understand your airline’s or travel agent’s cancellation policy. In the above circumstances it is important to also be aware that any failure by a business to uphold its refunds or cancellation policy may constitute misleading or deceptive conduct under the Australian Consumer Law.
When engaging with an airline or travel agent to request a refund, it is essential that you review the terms and conditions of your purchase to ascertain whether or not you are entitled to obtain a refund. The terms and conditions of airlines and travel agents are not one size fits all. Each company is different, and it is important to be clear on where you sit before approaching them for a refund. When you are clear on your entitlements you will then be well positioned to draft a letter giving you the best chance of obtaining a favourable remedy.
The ACCC has indicated that in instances where your airline or travel agent does not specify the remedy they will provide if a cancellation occurs, then you should be entitled to a refund. In some circumstances, airlines are opting to remedy their customers by issuing flight credit to be utilised for future travel within a specified time period. This may be an acceptable remedy for some, but for those who desire a full refund this is unsatisfactory due to the uncertainty brought about by the pandemic and government restrictions remaining into the foreseeable future limiting travel. If you are unhappy with an offer of travel credit, you must become familiar with and review the terms, conditions and policy of your booking so that you are well positioned to challenge your airline’s or travel agent’s offer. Additionally, despite the aforementioned impact on the consumer guarantees under the Australian Consumer Law due to government restrictions and Covid-19, it still remains a breach of consumer law for businesses to mislead their customers. This means that if your airline or travel agent is pushing you to accept credit for your cancelled flight, but the terms, conditions and policy of your ticket at the time of booking did not stipulate that credit would be issued for a cancellation, then this is likely to be misleading or deceptive conduct and a breach of the Australian Consumer Law. Your airline cannot insist on issuing credit if this was not in the terms, conditions or policy at the time of purchase, and you should insist on receiving a full monetary refund.
It is important to remember that in circumstances where you have purchased tickets from an international airline, Australian law should still apply because the tickets were purchased in Australia. Additionally, if you have purchased your flights through a travel agent, then they are the responsible party for your booking and should be contacted to seek a refund from the airline on your behalf.
De Marco Lawyers has recently acted for a client who had purchased a travel package from an unnamed travel services provider. The travel package, including flights and tour, was purchased pursuant to terms, conditions and policy which specifically stipulated that all monies paid would be refunded in full, if a request for a refund was made in a specific time and if there was an event of unavoidable and extraordinary circumstances that the trip had to be cancelled, including situations beyond the control of the company, the consequences of which could not have been avoided even if all reasonable measures had been taken. In light of the pandemic, the trip was cancelled, and a request was made in the specified time period for a refund. In response to the reasonable request for a refund, the agent of the travel company explained that the Directing Manager had subsequently made the decision to retroactively and unilaterally amend the cancellation terms and conditions of all bookings, so that only a credit voucher for future travel would be provided in place of a refund for suspended or cancelled trips. De Marco Lawyers was then approached by the client for assistance in determining their rights, and to attempt to enforce the terms of the booking stipulated at the time of purchase to obtain a full monetary refund. It was subsequently raised with the travel service provider via a thorough letter of demand that unilaterally altering the terms of purchase, and changing the refund entitlements of its customers could amount to a breach of Australian contract law and Australian Consumer Law. The travel service provider was notified that the matter would therefore be pursued vigorously, and the relevant consumer protection agencies were to be notified if a refund was not forthcoming. In response, a refund was duly provided with no resistance.
This article is intended only to provide a summary of the subject matter covered. It does not purport to be comprehensive or to render legal advice. No reader should act on the basis of any matter contained in this article without first obtaining specific professional advice.
DISCLAIMER: We accept no responsibility for any action taken after reading this article. It is intended as a guide only and is not a substitute for the expert legal advice you can get from De Marco Lawyers and other relevant experts.