Jetstar in court for misleading claims on refunds

17 December 2018

The ACCC has instituted proceedings against Jetstar Airways Pty Ltd (Jetstar) for making false or misleading representations about consumer guarantee rights under the Australian Consumer Law (ACL).

Jetstar has admitted that it made representations on its website that some fares were not refundable, and that consumers could only get a refund if they purchased a more expensive fare.

“No matter how cheap the fares are, airlines cannot make blanket statements to consumers that flights are non-refundable,” ACCC Chair Rod Sims said.

Jetstar has also admitted that its terms and conditions contained representations that consumer guarantees under the ACL did not apply to its flight services, and that Jetstar’s liability in providing remedies to consumers was limited.

The ACCC and Jetstar have jointly submitted to the Federal Court that Jetstar should be ordered to pay a $1.95 million penalty, and to make a contribution to the ACCC’s costs.

The Federal Court will now decide whether the proposed penalties and other orders sought are appropriate.

Services such as flights come with automatic consumer guarantees, and these rights cannot be excluded, restricted or modified.

If a flight is cancelled or significantly delayed, passengers may be entitled to a refund under the consumer guarantees, which give consumers a right to a remedy if services are not supplied within a reasonable time.

“It’s frustrating for travellers when they have difficulty getting a refund for flights when they are entitled to one. This case is important not only for holding Jetstar to account, but sending a wider message that businesses cannot exclude or limit consumers’ rights under the Australian Consumer Law,” Mr Sims said.

The ACCC has published new guidance to help consumers understand their rights in relation to flight delays and cancellations, which can be found here: Flights delays & cancellations

Background:

The institution of proceedings against Jetstar is part of the ACCC’s response to common consumer issues arising in the airline industry and the ACCC’s concerns. The ACCC detailed its industry-wide concerns in its report Airlines: Terms & Conditions Report.

The ACCC has also separately accepted a court-enforceable undertaking from Jetstar, as well as each of Qantas, Virgin Australia and Tigerair. These undertakings are commitments from the airlines to amend their policies and practices in relation to the Australian Consumer Law consumer guarantees.

More general information about consumer guarantees under the ACL can be found here: Consumer guarantees.

Release number: 
266/18
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