Since the COVID-19 pandemic first began to take effect in March 2020, Australian travellers and travel services have struggled with the constant cancellations of domestic and international travel alike. Lockdowns have resumed in most of Australia which indicates that, even if vaccination rates meet the Federal Government targets, COVID-19 is likely to be part of Australian life for the foreseeable future.
If you have made a booking through a travel agent and it was cancelled, depending on the circumstances, you may be entitled to a full refund under the Australian Consumer Law (ACL). Key points for consumers include:
• Entitlement to a refund for cancellations due to government restrictions will depend on the terms and conditions of your booking that were in place at the time of your booking;
• Travel cancellations due to government restrictions may impact your rights under the consumer guarantee provisions of the Australian Consumer Law (ACL), however, you may have other remedies subject to the common law, contract or state legislation.
Under the ACL, booking and advisory services provided by travel agents come with consumer guarantees that:
• The services will be provided with due care and skill;
• The services will be reasonably fit for the specified purpose;
• The services can reasonably be expected to achieve the desired result; and
• The services will be provided within a reasonable time.
There is also a provision in the ACL which provides that persons in trade and commerce must not engage in misleading or deceptive conduct.
Essentially, to recover a refund for services paid for but not supplied, you would have to prove a major failure of compliance with one of the above consumer guarantees or another obligation under the ACL by the person.
Changes to Standard Terms and Conditions
Outside these consumer guarantees, suppliers of travel services are generally obliged to provide refunds for cancellation of their services, unless the contract terms provide otherwise.
It is important to note that as the COVID-19 pandemic has progressed, travel agencies have updated their terms and conditions to better protect themselves in the now likely event of government imposed lockdowns and subsequent forced cancellations. Accordingly, it is important that you always review the terms and conditions of any bookings you have made, or are likely to make, with specific reference to the cancellation policies.
The ACCC has issued guidelines to the travel industry which encourage agencies and service providers to provide refunds where possible, and to act fairly and reasonably when dealing with consumers who are out of pocket.
Despite the above guidance, the frustration for many consumers is that despite large amounts of money being paid, services ultimately have not been provided. Moreover, while some travel services have relied on the offer of travel credit as a stopgap remedy, the uncertainty remaining around both international and domestic travel, and the reality of government restrictions continuing, an offer of credit will be unsatisfactory.
To add to the frustration, it may be difficult to obtain a refund under the Australian Consumer Law unless you can prove some sort of fault on the part of the agent, because the agent is an intermediary, and not supplying the relevant travel service, such as a cruise, directly to the consumer.
Another option is that you may be entitled under contract law to a refund for any monies paid for any services not provided, even where the service is provided by a third party, because you have not received anything in exchange for the money you paid. Your rights will depend on the contractual arrangements between you, the agent and the third-party service provider.
Refund for Hardship
Under ‘best practice’ guidelines issued by the Australian Competition and Consumer Commission (ACCC), travel service providers are encouraged to offer refunds, even where the contractual term states that credit only may be provided, where the consumers are suffering hardship. These are guidelines only, and not enforceable, however if there is an exceptional case of hardship, it could be argued that the denial of a refund is ‘unconscionable’ and in contravention of the ACL.
Recently, our litigation team successfully negotiated a full refund from a travel agency whereby our clients had paid for a planned trip to Europe in April 2020 that never occurred. In this matter, the travel agent misrepresented the terms of a credit voucher that was offered in exchange for the money paid for the cancelled trip.
The agent had told the consumers that the voucher could be used to purchase all of the types of travel services that were originally planned for the trip, but in fact the voucher’s terms stated that it could only be used for specific types of services. Accordingly, it was alleged that there were potentially multiple contraventions of the Australian Consumer Law for the agent’s failure to provide accurate advice, which persuaded the agent to provide a full refund to avoid legal action.
If you are Trying to Recover Money Paid for Travel Services
You should contact us for advice, as each case will be different on the individual facts, timing of your booking, as well as the terms and conditions of the relevant travel services provider.
If you would like to go through your options or obtain assistance regarding a dispute with a travel agency or travel services provider, please contact our office and you will be put in touch with our experienced litigation team.