Consumer challenges holiday refund policy

WELLINGTON: Consumer New Zealand is calling for Airbnb and Bachcare to be taken to court over how they charge people who cancel bookings.

The consumer advocacy group has laid a complaint with the Commerce Commission, saying the companies could be in breach of the Fair Trading Act.

Chief executive Jon Duffy said the sites' policies have resulted in some customers being hundreds of dollars out of pocket.

He said it was ‘‘plainly unfair’’ that consumers who could not travel because of the Covid19 lockdown were denied a full refund.

‘‘We've received quite a number of complaints from consumers who were caught up in the second lockdown . . . that shut Auckland down,’’ Mr Duffy said.

‘‘They'd had booked accommodation in other parts of the country, couldn't travel there because of governmentplaced restrictions but were charged, we think, extortionate fees for cancelling their bookings with accommodation providers.

‘‘In some cases, with Airbnb for example, 100% of the accommodation was charged to the person cancelling. This is in circumstances where there's enough time for the accommodation provider to relet [the property]. So it could be in many of those cases that the accommodation provider is able to effectively charge twice for that property, penalising that first consumer because they didn't get to stay there.’’

Mr Duffy said the Airbnb host chooses which cancellation policy is applied, and that can include forfeiting 100% of the accommodation fee for cancelling less than 60 days in advance. In contrast, if an Airbnb host wanted to cancel a booking, the most they could be charged by Airbnb was $145.

Mr Duffy said in the first lockdown, which was nationwide, Airbnb was ‘‘really good’’ and applied a policy where it refunded consumers, but appeared to have gone back to normal operating conditions for regional lockdowns.

‘‘We think they could show a bit of discretion here and use the policy that they used under the first lockdown.’’

Bachcare's policy states the customer will lose all accommodation fees and the service fee, even if they cancel 60 days before the start of their stay, he said.

Consumer NZ asked both companies whether they had reviewed their terms for compliance with the Act, which bans unfair terms in consumer contracts, but did not get satisfactory answers, Mr Duffy said.

In its complaint, Consumer NZ has asked the Commerce Commission to seek a court declaration that the cancellation terms are unfair. Any term the court deems unfair cannot be enforced by the trader.

One customer, Marilyn, who lost more than $1000 when the pandemic put a stop to her travel, is pleased the complaint has been laid.

Marilyn booked accommodation with Airbnb in Canada for August, but cancelled the $1200 booking when New Zealand went into lockdown in March.

She was told she wasn't allowed a refund, and said it took months of negotiation before Airbnb agreed to give her just $66.