Trip cancelled? Here’s what you need to do next

More than 6000 people have complained to the ACCC about their travel company’s handling of refunds. We’ve looked into what your options are for getting your money back.

Apr 29, 2020, updated Apr 29, 2020
Flight Centre has reported a $510 million loss. (Photo: ABC)

Flight Centre has reported a $510 million loss. (Photo: ABC)

If you’re struggling to get a refund for a trip you planned and paid for before COVID-19 restrictions came into place, you’re not alone.

More than 6000 people have contacted the Australian Competition and Consumer Commission to complain about travel companies since the pandemic began.

Some of the most common problems include travel companies:

  • Offering credits but not refunds
  • Offering refunds, but only if you pay hefty cancellation fees
  • Changing their terms and conditions

So, what are your rights and how can you exercise them?

Am I entitled to a refund?

Unfortunately, there is no cover-all easy answer to this.

In normal times, if you don’t get what you paid for, you’re generally entitled to a refund or a credit.

However, because this event is out of your travel company’s control, that general guarantee might not apply.

So, the first thing you need to do is check the terms and conditions that came with your ticket.

The ACCC has clearly said if the ‘T-and-Cs’ say you have a right to a refund, then you still do.

“[The company] can’t come along and change them later,” ACCC head Rod Sims told RN Breakfast last week.

However, terms and conditions might also contain a “force majeure” clause, which could exempt the company from their obligations in the case of the major disaster.

The Consumer Action Law Centre’s Gerard Brody said even if your contract has this clause, you might still be entitled to a refund.

“Consumers should know that those clauses are narrowly interpreted by the law and may only be valid if they specifically mention a pandemic,” Brody said.

If not, you might be entitled to a refund — not just a credit — under “frustrated contract” laws.

“If a service provider has cancelled a trip or a tour or a ticket and they can no longer supply it, then what that means is that contract really has been frustrated because of the pandemic and you are entitled to a refund,” Mr Brody said.

“The service provider might be entitled to some reasonable costs already incurred by it, but it’s really up to them to show what those rates will cost.”

Talk to the company

Ask for what you believe you’re entitled to, and what you think is reasonable.

The Consumer Action Law Centre recommends:

  • Getting everything you can in writing — put your complaints in an email
  • Taking detailed notes of any phone calls, including the date and time they occurred
  • Asking to speak to a manager

Take your complaint to social media

Choice’s Jodi Bell says complaining on the company’s social media is worth trying, though it might not be as effective as usual, given the situation.

“How effective it is will probably be affected by the extent that everyone’s trying to do the same thing,” he said.

On the other hand, all those people might prove a helpful resource.

One company under particular scrutiny for its handling of coronavirus is Flight Centre, who up until last week was charging $300 per person in cancellation fees for a refund, even if the tour operator or airline was also charging a fee.

Flight Centre was, however, offering customers credit.

Last week, it capped those fees at $600 per group for international travellers and $100 per group for domestic travellers.

Steven Hession is the creator of a Facebook group putting pressure on the company to do better.

He was planning a trip to Thailand with his wife to celebrate her 50th birthday, but now he’ll have to pay a $600 fee if he wants to get his money back.

“The whole idea of the Facebook group was it was a place where people that have been similarly affected by Flight Centre could speak to each other, maybe get some advice,” he said.

The group has had former Flight Centre staff answering questions consumers might have.

“A lot of times when you’re just an individual and you’re trying to argue with a corporation, you feel like you’re very small in the big pond, so it just provided a place where people could find a bit of support,” Hession said.

Thousands of people have joined the Facebook group, as well as another group started by Melissa Johnston.

“I can’t tell you the number of messages I’ve had from people saying, ‘I’m on my own … and I’m so appreciative to have this,” she said.

Get in touch with a consumer body

The ACCC can’t negotiate your case, but they can apply pressure to companies flouting the rules — so they need to hear from consumers who aren’t being treated fairly.

The ACCC is currently in discussions with travel companies, including Intrepid and Flight Centre, and has the power to take legal action resulting in large fines.

“[Companies] know in the background that’s the power we have, so we’ve been engaging with companies and airlines and got a lot of changes to their policies to conform with the law,” Mr Sims said.

You can also contact local consumer bodies to get advice relevant to your state or territory.

Travel insurance

If you have insurance, check your policy closely and call your provider to see what it will cover.

If your travel provider is refusing to give you a refund if you cancel, you might be able to get the money back through insurance.

Did you pay for your travel with a credit card?

If you paid for your travel with a credit card and you didn’t get what you paid for, you can try asking your bank for a credit card chargeback.

Bell said to let the travel company know that’s what you intend to do.

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“Essentially [the bank will] just come and take the money out of their account, so that’s not good for them,” he said.

“So often that threat is enough.

“If they think they are being reasonable then your bank becomes the arbiter and they have to decide whether to process it or not.”

What happens if the airline or tour company goes under?

One of the biggest complaints from consumers is that companies are offering credit, rather than refunds — but what happens if the company doesn’t survive the pandemic?

“Unfortunately, if a company does go insolvent, then consumers are considered unsecured creditors and they’re probably low down the list of priority creditors when it comes to winding up a company,” Mr Brody said.

Bell said a recent Choice investigation into insurance policies and insolvency did not find a single policy in Australia that covered travel agency insolvency.

He said about 17 per cent of policies would cover you if a tour operator or airline went under, but there would be a limit on how much you were covered for.

Failing that, if you paid with a credit card, your bank might be able to help with that as well.

“If you process a chargeback [because] the company has gone insolvent, your bank will go and claim it off their bank,” Mr Bell said.

Taking your travel company to court

If negotiations with your providers are at a stalemate, your state’s small claims tribunal may be the best avenue you have for challenging it.

Under personal distancing restrictions, small claims tribunals are running limited operations, so this might not be a speedy process.

Hession has lodged his complaint against Flight Centre with the Victorian Civil and Administrative Claims Tribunal.

“They’re obviously being swamped by multiple calls along the same lines. They have warned all new applicants that this will take some time because there’s a lot of people in the same position,” he said.

There is also a fee — it cost him $50 to lodge his claim. But you represent yourself and will get an independent legal decision on your case.

Join a class action

Class action involves mounting a legal case against a company on behalf of seven or more people, who have been similarly wronged.

You need to find a legal firm to represent you, and one person with a strong case to be the lead plaintiff.

Last week, the High Court ruled in favour of a group of travellers who received compensation for their disappointment after their European river cruise was replaced by a bus tour in 2013.

There are already hundreds of people who have expressed an interest in launching such a case against Flight Centre,” Mr Hession said.

“People who get paid a far cry more than me will decide what is legally correct stance on this matter, but I’m happy to ask the question, and have them the provide the answers, absolutely.”

Be patient

Lastly and frustratingly, be patient.

If you can’t work this out with your travel company, it’s probably going to take a long time to get a resolution.

– ABC / the specialist reporting team’s Loretta Florance

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