Pandemic highlights gaps in consumer law: urgent reform & regulation needed to protect travellers

8th Jul 2021

Reform to Australian Consumer Law and further regulation is urgently needed to fix gaps that result in travellers losing money and receiving inconsistent refunds for cancelled travel.

“The pandemic, and associated travel restrictions, have made it very clear that Australian Consumer Law does not protect consumers sufficiently,” said Ms Victoria Roy, travel lawyer and spokesperson for the Australian Lawyers Alliance (ALA).  “Many Australians wrongly assumed that the law would protect them from losing their money when government restrictions forced them to cancel their travel plans.”

The survey findings outlined in the CHOICE Consumer Protection for Australian Travellers report released yesterday show that Australians have received inconsistent refunds and credits when travel was stopped by the government’s response to the COVID-19 pandemic.

“Under s.267(1)(c) of the Australian Consumer Law if the travel service cannot be provided due to an event such as government enforced border closures or restrictions on movement, the usual statutory guarantees regarding provision of services do not apply.  The booking is simply cancelled without any recourse against the travel company,” said Ms Roy.

“This means that the consumer’s right to a refund depends on the booking terms and conditions.  In many cases this does not mean a full refund or being entitled to a credit note despite being legally prevented from being able to take their planned holiday.

“Reform to the Australian Consumer Law is needed to close this gap, provide clarity and ensure that Australians are able to receive a refund when they are forced to cancel travel plans.

“Regulation of travel credits and vouchers to support the travel industry whilst being fair to consumers is also needed.

“We would like to see that consumers who receive travel credit instead of a refund are protected by guarantees that future prices won’t be inflated, are given a reasonable validity period, are protected against future insolvency, and have the ability to transfer credits to another person.

“Law reform, plus the enforcement of these regulations, will help give Australians the confidence to book travel again.”

Tags: Consumer law COVID-19