US firm dodges SA law over refund
Hospitalised traveller gets no joy from Princess
THERE is no doubt that consumers in South Africa are among the best protected in the world. Legislation is far-reaching and effectively shifts power towards them and away from business.
But the Consumer Protection Act was implemented only in 2011 and has yet to be tested in any significant way. This means it can be interpreted in different (usually self-serving) ways, making it tricky for consumers to always know where they stand.
When Johannesburg reader Peter Meintjes was involved in a serious car accident in July and ended up in intensive care followed by weeks of strict bed rest, he forfeited a six-day Greek island cruise leaving Athens on August 10, as well as business class air tickets.
The act is clear on situations like this: no cancellation fee or penalty can be charged if the traveller is unable to honour the booking because of death or hospitalisation. In other words, the traveller gets his or her money back.
But when Meintjes complained to me two weeks ago, he had not been refunded a cent.
He and his wife booked and paid for the R36 000 Princess Cruises trip and R87 000 airline tickets through Flight Centre in May. Flight Centre had booked the flights directly, but it had worked through Thompsons Holidays to secure the cruise. Thompsons Holidays, in turn, had used the cruise company’s booking agent in South Africa, Discover the World Market, which acts on behalf of the cruise company.
Princess Cruises, based in Los Angeles, refused to refund Meintjes. It said he had not taken its R3 400 insurance policy, which covers cancellations. US consumer law does not oblige companies to refund for hospitalisation.
Flight Centre, Meintjes said, had promised it would pay him out for the flights as soon as the airline refunded the money. But its hands were tied regards the cruise refund because Princess Cruises refused to pay.
Thompsons and the booking agent, meanwhile, claimed that they were mere “agents” and not the suppliers of the product, and therefore not responsible for the cruise refund either.
“The point behind us cancelling was not frivolous at all — it was instigated by a very serious back injury,” said Meintjes. “I was completely flat on my back for the better part of two months.”
After the accident, he asked Princess to give them a credit for a later cruise, but this was declined.
“I felt they really screwed us over,” he said. Meintjes had planned to take out his own insurance but landed in intensive care before he got around to it.
Cruise agent Sabrina Allcock said the Consumer Protection Act did not apply to the transaction because she had acted as an agent on behalf of an overseas supplier. “Customers should be aware that the conditions of the supplier will apply if they are not covered by a cancellation policy. We remind passengers and agents of this in our standard responsibility clause, which is included with passenger confirmation at time of booking.”
She said a decision to refund Meintjes now lay with the cruise company’s legal department.
When I took up the case with Flight Centre, client liaison Angie Bridger apologised that the case had not been passed on to head office.
She said the air ticket refund was still being processed, but because Meintjes had cancelled for medical reasons Flight Centre would refund the fares upfront.
And, Bridger said, despite his not having taken out any of the insurance policies offered, Flight Centre would repay the commission earned on the flight and cruise booking as “a gesture of goodwill”. On Tuesday, R90 000 was put into Meintjes’s account.
A strict reading of the Consumer Protection Act says it applies to every transaction within South Africa, including the promotion of goods or services. And it is applicable irrespective of whether the supplier resides, or has its principal office, inside or outside the country.
I asked national consumer commissioner Ebrahim Mohamed for clarity.
“Since we have not investigated this particular matter, we cannot comment specifically on it,” he said. However, the commission would certainly look into it if a complaint was lodged.
“Your reading of the act in this regard is correct. But it can be a rather complex matter and each case needs to be taken on its merits,” he said. Issues that would determine liability included who the parties to the transaction were, the nature of the agreement, where payment took place and who rendered what service.
“Until the consumer tribunal or court rules on a test case brought before it, both suppliers and consumers should be guided by the act. All suppliers in South Africa should indicate to their overseas suppliers that they have to abide by our Consumer Protection Act. It’s a critical and intrinsic part of the South African legal framework,” Mohamed said.
Tune in to Power FM’s ‘Power Breakfast’ at 8.50am tomorrow to hear more from Megan