The ACCC has launched legal action against a travel company for misleading clients about an airfare add-on supposed to protect them from the cost of making changes to flights.
The consumer watchdog, which last year prosecuted Trivago over alleged false advertising, instituted proceedings in the Federal Court this week against student travel specialists STA Travel for allegedly making false or misleading claims in relation to its MultiFLEX Pass product.
The ACCC alleges that, since September 2011, STA Travel has misled consumers by representing in advertisements that anyone changing the date of their flight after purchasing a MultiFLEX Pass would not pay extra or would only be charged the difference in the cost of the airfare and applicable taxes.
In fact, it is alleged STA Travel charged many consumers hidden commissions and other fees on top of the difference in airfare and taxes – and in some cases even where there was no difference in cost.
“We were particularly concerned about STA Travel’s advertisements because they explicitly said MultiFLEX Pass consumers would avoid fees for date changes,” ACCC Commissioner Sarah Court said.
“Some advertisements, for example, said that the MultiFLEX Pass allowed consumers to purchase date changes ‘upfront’, to ‘prepay’ for date changes, or to make ‘fee free’ or ‘no fee’ date changes.
“However, we allege that some consumers were paying STA Travel hundreds of dollars in hidden commissions and other fees that they were never told about.
[pro_ad_display_adzone id=”15046″ align=”right”]“Many consumers who thought they were being prudent by purchasing an add-on to avoid high fees were instead worse off.”
The ACCC alleges that STA Travel has generated revenue of over $12 million from the sale of MultiFLEX Passes since 2011, and that nearly two thirds of the consumers who used their MultiFLEX Pass to change flights were charged additional commissions or other fees.
Additional commissions or other fees totalling more than $1 million were collected by STA Travel since 2011 from consumers using a MultiFLEX Pass to make date changes.
The ACCC (Australian Competition and Consumer Commission) is seeking penalties, injunctions, costs, and other orders against the travel company.
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