ACCC welcomes Virgin Australia’s move to stop pre-selecting travel insurance

1 December 2016

Virgin Australia has stopped the pre-selection of travel insurance on its online booking platform following discussions with the Australian Competition and Consumer Commission.

In a welcome change Virgin Australia’s customers will no longer have to ‘de-select’ travel insurance if they do not wish to purchase it. Instead, customers of Virgin Australia will select travel insurance if they wish to purchase it.

“The ACCC has been engaging with domestic airlines seeking their agreement to cease the practice of pre-selection. The ACCC has been concerned that the ‘opt-out’ model means that a number of consumers inadvertently end up paying for unwanted ‘pre-ticked’ extras,” ACCC Chairman Rod Sims said.

“The ACCC will continue to work with other domestic airlines to end the practice of pre-selecting optional extras in the booking process, including baggage allowances, seat selection and travel insurance.”

“Experience overseas, including in New Zealand, shows consumers are more than capable of making purchasing decisions themselves. There are better ways for airlines to highlight the availability of these extras to consumers,” Mr Sims said.

“The ACCC welcomes Virgin Australia’s decision, and now calls on other domestic airlines to follow suit. We’re certainly hopeful that they will make changes voluntarily in the short term, to the benefit of their customers, or the ACCC will explore other options.”

Background

It is noted that Qantas does not pre-select optional extras on its online booking platforms.

In 2015, the New Zealand Commerce Commission (NZCC) publicly called for all New Zealand businesses to end the use of “opt out pricing”, with Air New Zealand agreeing to do so voluntarily.

In March 2016, Jetstar gave court enforceable undertakings to the NZCC that it would cease its pre-selection of ‘opt out’ services when selling airline tickets to New Zealand customers online by 30 April 2016.

AirAsia has also since stopped its pre-selection of services on its New Zealand online booking platforms.

Release number: 
MR 226/16
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