APT agrees to drop “marketing and overhead” deductions from refunds and compensate clients

Thousands of Australians will receive additional refunds for cancelled travel after APT and Travelmarvel agreed to stop deducting marketing and overhead costs from booking refunds and to reimburse customers who had previously had these costs withheld.

The move comes after talks between the cruise and tour line and the Australian Consumer and Competition Commission.

The ACCC said in a statement today it was concerned that during the COVID-19 pandemic “APT had been deducting, and representing to consumers that it was entitled to deduct, greater amounts from refunds than it was entitled to deduct under its terms and conditions”.

Following months of talks, the ACCC has accepted a commitment from APT to stop deducting marketing and overhead costs from booking refunds impacted by the COVID‑19 pandemic.

Managing Director of Australian Pacific Holdings, Chris Hall said after the ruling the ACCC had “a different interpretation of our terms and conditions”

He said: “Over the past 12-months, the APT Travel Group and the travel industry have been navigating an extraordinary environment, unlike anything seen before. During this time, we have been working closely with guests who have been affected by national and global travel suspensions to find the best possible outcome for them. 

“We have also been in discussions with the Australian Competition and Consumer Commission (ACCC) over the matter of customer refund policy arrangements. 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

“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 These charges have now been replaced by a one-off $400 per passenger administration fee.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. .

The ACCC statement said APT had agreed to provide customers who have previously received a refund quote with a revised quote, and will reimburse customers who have already received a reduced refund due to marketing and overhead cost deductions.

“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.

“The ACCC considered that 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.

“We are pleased that thousands of customers will now receive additional refunds and that this commitment will provide faster redress for consumers than court action, which would have been our next step,” Ms Court said.

The ACCC understands that affected customers have either already been contacted by APT or will shortly be contacted about their revised refund.

“The ACCC’s position on refunds for cancelled travel has been very clear for almost a year now: travel businesses cannot deduct fees unless there are applicable terms and conditions in their contract that expressly permit them to do so,” Ms Court 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.”

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.

 Mr Hall said: “As has been the case since April 2020, as an alternative to the refund option, we are offering a Future Holiday Credit of 100% of the value of what was paid, with the Group absorbing all incurred costs. The 100% Future Holiday Credit is valid until the end of 2023, available for use on any of our brands, to any destination globally, and is fully transferable to a family member or a friend. 

“The APT Travel Group continues to operate within all Australian regulations and requirements, this includes within Australian Consumer Law and our travel agency licensing requirements. Our refund policy continues to be in line with our terms and conditions for force majeure events, such as a pandemic and government enforced border closures. However, the adjusted refund and 100% Future Holiday Credit go beyond our standard terms and conditions. 

“The APT Travel Group has made constructive steps of its own volition to provide greater scope and clarity around the issue of refund processing. 

“Throughout this entire period we have also been considering, on a case-by-case basis, providing a full refund to any consumers who can provide evidence that they are experiencing hardship, including medical or financial, arising from the COVID-19 pandemic. 

“We realise this has been a difficult and upsetting time for many travellers. As always, we appreciate the support and patience of all our guests. In turn, we are committed to getting through this period and supporting our guests, staff, global networks, and also the Australian travel industry. 

“As Australia’s largest family owned and awarded tour company with over 90-years of operation, the APT Travel Group has always been strongly committed to positive customer and guest relations outcomes across our operations. This includes the impact of COVID-19 imposed restrictions on some product offering. 

“We are working through contacting our impacted guests and they will be communicated with by the 31st March 2021.”

Consumer advocate Adam Glezer of Travel Industry Issues – The Need For Change for Australians, which has championed the refund issue, received a large number of congratulatory comments on their Facebook page today after announcing the news.

On the Facebook post, Mr Glezer says: “Previously APT was charging customers that were wanting refunds 15% in marketing and overheads. For example, if your tour was $30,000 you were charged $4,500. It has now been changed to $400 per person.”

He told Cruise Passenger:  “I am glad that the ACCC has intervened and made it clear that deducting marketing and overhead costs from customer refunds is unacceptable. Any money back in the customers pocket is a step in the right direction”.

“I do not believe APT should be able to charge a $400 administration fee to process refunds, considering it is not in the customer’s original terms and conditions”.
“The handling of COVID-19 travel related refunds has been messy, overly complicated and caused excessive stress for consumers. A review of the ACL to include a right to a refund for such instances is desperately needed. A parliamentary inquiry into the travel industry is also necessary”.
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