Flight Centre Caves to ACCC Pressure & Stops Issuing $300 Refund Fees

Flight Centre has announced the company will stop issuing fees on customers either modifying or cancelling their bookings due to the COVID-19 pandemic, after aggrieved customers complained to the consumer protection watchdog.

Up until this point, Flight Centre was charging its customers $300 to request a refund on an international flight, and $50 for a domestic flight. This fee would be applied even if the air carrier, tour operator or service provider issued their own cancellation fee, causing a number of customers to complain to the consumer watchdog.

For a number of weeks now, the Australian Competition and Consumer Commission (ACCC) has been pressuring Flight Centre to modify its cancellation and refund policy in light of the recent coronavirus pandemic that has sent both the business and leisure travel industries into disarray.

The ACCC said it had received 6,000 complaints from Flight Centre customers regarding its refund policy and cancellation fees. The consumer watchdog also said that it was prepared to take Flight Centre to court if the company failed to change its position on consumer refunds.

In a letter issued to customers over the weekend, Flight Centre’s general manager, Allisa O’Connell said the company made the decision after consultation with the ACCC to protect consumer rights.

“The decision to waive fees will impact our business, nevertheless we have heard your feedback and we believe this step is the right one for the current economic conditions where stand-downs and job losses are a daily occurrence for many Australians.”

“Please note this waiver applies to our fees - we cannot waive fees or conditions that airlines and other third-party suppliers impose,” she added.

Flight Centre has confirmed that the company fees will be waived, and applied retroactively for any customers that were forced to pay the cancellation or refund premium from March 13th, 2020.

Previously, the cancellation fee was capped at $100 for domestic flights and $600 for international flights.

Ms O’Connell has said that Flight Centre employees will continue to process refund requests from airlines and tour operators, however, it’s expected that these will be delayed under a high volume of requests.

Rod Sims, Chair of the ACCC said that customers should remain patient when communicating with a business that is dealing with high-volumes of cancellations amid the coronavirus pandemic.

“We are continuing to discuss issues in relation to refunds and cancellations with the travel sector, and encourage travel providers to treat consumers fairly in these exceptional circumstances,” he said.

“While we know some consumers are getting a refund or credit for the cancelled travel plans, we do ask people to be mindful of the significant impact that this pandemic will have on the travel industry.”

Sims urged the public to be vigilant of their consumer rights, but to also accommodate the extraordinary pressure that organisations are under right now in the pandemic economy.

“We ask consumers to remain patient and to be mindful of the significant pressures on businesses at this time and, where possible, contact the business by email or website, rather than by phone… These are very complex issues and may take smaller businesses more time to respond,” Sims concluded.

The ABC asked Flight Centre’s GM about the health of the company in light of the pandemic, and its March decision to sack thousands of its workers. Ms O’Connell said “we announced [via the Australian Securities Exchange] on April 6 that we had taken very positive steps to strengthen our long-term liquidity position and were well placed financially to weather a prolonged downturn in demand resulting from restrictions on travel and trading,” she said.

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