Choice, Australian Competition and Consumer Commission and NSW Fair Trading have waded into the multi-million-dollar refunds mess this week as COVID chaos costs passengers tens of thousands of dollars and continues to damage trust.
Less than 20 per cent of those owed money for cancelled holidays – cruise lines prominent among them – got a full refund. And in over half the cases, it took between three and six months of persistent calling and writing, says a Choice survey.
The rights advocate’s report points out how a huge lack of trust issue has now built up between consumers and the industry.
Just this week, angry passengers took to social media after discovering one river cruise line which cancelled cruises among Aussie passengers was reselling the cabins in the US. The Australian passengers fear a long wait for a refund, just being offered a future cruise credit.
The line told Cruise Passenger while it looked like double dipping, in fact the cabins were unlikely to sell – and limited passenger numbers mean every ship sailing in Europe was doing so at a loss.
The ACCC, the country’s biggest competition watchdog, singled out “a number of cruise companies” for their policies, warning passengers this week to be aware that they can only get their money back immediately for “extenuating circumstances” such as medical conditions or financial hardship.
NSW Fair Trading also confirmed that it has “experienced a significant spike in complaints from consumers about cancelled travel arrangements arising from COVID restrictions.
The Choice report says: “Trying to sort out travel cancellations and refunds has often involved punishingly long waiting times on the phone and a wearying game of pass the buck: airlines, accommodation providers and other travel businesses tell customers to take it up with their travel agent or third-party booking site, who then send customers back to where they started.”
The main thrust of the complaints is complexities in terms and conditions, with many travel providers “appear not to have honoured their own Ts and Cs, or even updated them after the fact in some cases.”
Long time cruisers Elizabeth and Alex Silady said they are still waiting for a $6,000 refund of their deposit, which they paid for their $19,550, 14-day river cruise from Amsterdam to Budapest originally booked to depart in September 2020.
The cruise has been cancelled twice because of the pandemic and uncertainty over international border closures, and they only received a Future Cruise Credit.
Mrs Silady, who is in her 70s, wants a refund as it is unlikely she and her husband would travel overseas again.
“I was supposed to be on the cruise in September 2020, which did not happen so I rebooked for August 2021 which has also been cancelled. The line only offered us a credit voucher to book future trips. But we are not sure if we are travelling anytime soon.
“I am 71 and my husband is 73. When and if this virus disappears, we will be way too old to travel. In the meantime, the line has everyone’s money …shame on them,” she told Cruise Passenger.
Like a number of lines, the company is offering a full refund only after December 2024. In the meantime, it is giving future cruise credits. The line added it will refund those with financial or medical hardships.
The ACCC told Cruise Passenger: “The ACCC has investigated a number of cruise companies to ensure they are not misleading consumers about the remedies they are entitled to.”
The commission went on: “It is not possible to take any action where a business is relying on its terms and conditions, but is not misleading consumers about their rights under those terms and conditions. If a cruise company provides credits to consumers for cancelled bookings, rather than refunds, that company will not be in breach of the ACL (Australian Consumer Law) if it is acting in accordance with its terms and conditions and otherwise meeting its obligations under the ACL,” said a ACCC spokesperson.
There are now moves to change the law with 90 per cent of those surveyed by Choice maintaining it should be “easier for consumers to receive refunds from service providers, and for travel agents to obtain refunds from service providers on behalf of their clients.
Consumer advocate, Adam Glezer said: “We need laws to protect consumer rights for cancellations outside of human control. In my opinion, if customers have paid for a cruise in good faith and they are not getting the cruise, then they should receive a full refund. There are lots of companies who have taken away the option of a refund by changing their terms and conditions.”