ACCC updates guidance

THE Australian Competition and Consumer Commission (ACCC) has issued new “best practice guidance” for the travel industry in relation to COVID-19 related travel cancellations.

A document produced by the ACCC and Australian Consumer Law (ACL) regulators notes the struggle of many businesses to manage cancellations and the financial impact of the pandemic.

“That said, many consumers are also experiencing financial hardship and so it is important to recognise and balance the concerns of both businesses and consumers,” the document states.

A webinar conducted by the Australian Federation of Travel Agents (AFTA) for its members last week highlighted key elements of the new guidance, with broad expectations that consumers will be provided with free-of-charge refunds where consumers are entitled to one - such as cases of fully refundable tickets, rights under state or territory legislation or where terms and conditions of a purchase specify refunds. Terms & Conditions are key

The regulators expect that businesses will honour the terms and conditions of their contracts, meaning that if specified in T&Cs the payment of a refund may be contingent on the recovery of funds from a supplier.

Businesses may retain amounts relating to expenses incurred, and the available remedy for a customer may be a “credit note or similar” rather than a refund.

However even if T&Cs allow for credits, businesses should

“still consider providing refunds in cases or hardship or other exceptional circumstances,” the ACCC said.

In the case of travel purchases through agents or other intermediaries, businesses must take “active steps” to seek to recover funds from suppliers which must be remitted to consumers as soon as possible.

Customers must also be kept regularly informed of the steps being taken in the process.

In the case of primary suppliers, customers must be offered the choice of either a refund or an “attractive remedy in lieu of a refund” such as a value-added credit note.

Future cancellations

In cases where travel services have not yet been cancelled but there is a reasonable possibility they will not go ahead because of ongoing travel restrictions, businesses should advise clients of the approximate date when they will be able to confirm if the service will proceed or not.

AFTA CEO Darren Rudd confirmed the final document reflected significant changes made to the initial draft from the ACCC and ACL regulators, after submissions made by AFTA.

He said the Federation was aware of the issues raised, but the final “best practice guidance” document reflected information previously shared with members.

“AFTA is committed to building on its existing relationship with the ACCC to ensure it is a comprehensive partnership across multiple dimensions and layers of the organisation.”