The Australian consumer watchdog has directed a travel company to hand out additional refunds to thousands of customers who had their travel cancelled due to COVID-19.
Australian Pacific Touring, trading as APT and Travelmarvel, agreed to stop deducting marketing and overhead costs from refunds and to reimburse customers who had previously had those costs deducted.
APT is Australia’s largest family-owned tour and cruise company offering Australian and international tours and cruises.
The ACCC said it was concerned about the fees the company had been charging customers who had their travel cancelled, and it had accepted a commitment from APT to address the issue.
“The costs that APT deducted for marketing and overheads amounted to 15 per cent of the booking price and, with many holidays costing over $20,000, this meant a significant amount was withheld from the refunds given to consumers,” ACCC commissioner Sarah Court said.
“APT was not entitled to deduct these marketing and overhead costs as they were incurred before the booking was made and they would have been incurred regardless of whether a booking was made.”
Affected customers have either already been contacted by APT or will shortly be contacted about their revised refund.
APT will continue to consider, on a case-by-case basis, providing a full refund to any consumers who can provide evidence that they are experiencing medical or financial hardship arising from the COVID-19 pandemic.
Managing director Chris Hall said the company acknowledged it had been a “difficult and upsetting time” for many travellers.
“The APT Travel Group understands the ACCC has a different interpretation of our terms and conditions in relation to refunds; however, we have reached a mutually agreed position,” Mr Hall said.
“For some guests affected by imposed suspensions, this means that the refund amount initially advised, paid, or available to them will be increased.
“The adjustment relates to a reduction in the fixed marketing and overhead charges. These charges have now been replaced by a one-off $400 per passenger administration fee. Charges for third party costs that have been incurred will still be deducted from refunds.”
He said the company continued to operate within all Australian regulations and requirements and had made constructive steps to provide greater scope and clarity around the issue of refund processing.
Ms Court said the commission’s position on refunds for cancelled travel had been very clear.
“Travel businesses cannot deduct fees unless there are applicable terms and conditions in their contract that expressly permit them to do so,” she said.
“Our COVID-19 taskforce has engaged with dozens of travel businesses since the start of the pandemic, and we will continue monitoring the industry to make sure consumers are receiving the remedy they are entitled to.”