Coronavirus: Refund rows over holiday cancellations continue

Wednesday, 15 April 2020

Bachcare customers who booked a holiday home during the level 4 coronavirus lockdown can now get a refund if they wish.

The offer of credits, not refunds, by airlines such as Air New Zealand for flights that have been cancelled due to the Covid-19 pandemic has angered some customers, including those who say they will not be able to use the 12-month credits.

The issue of credits also upset a Bachcare customer, who lodged complaints with the Commerce Commission and the Disputes Tribunal. 

Previously Bachcare had offered a 12-month credit for stays due to occur while travel restrictions were in force.

**READ MORE:

* Refund or credit for a NZ holiday booked during lockdown?

* Coronavirus: Air New Zealand credits spark complaints to Commerce Commission

* Coronavirus: Kiwis cancel and change travel plans amid outbreak fears**

Its website now says it has ceased taking non-essential new bookings until April 23, and customers with bookings during the lockdown period can opt for a refund or a credit.

On Tuesday, she got an email from Bachcare saying it had received additional information from the Ministry of Business, Innovation and Employment that led the company to update its Covid-19 responses.

The complainant was told her refund would be processed once she had withdrawn her Disputes Tribunal claim.

However, Bachcare said bookings made before March 14 for check-ins between April 24 and the end of June were not eligible for a refund.

Change fees would be waived for customers who rebooked for a later date or took a credit redeemable for 12 months.

The Commerce Commission released guidelines on Wednesday to encourage businesses and consumers to 'treat each other fairly during the lockdown.

'The Covid-19 virus has had a significant impact on both consumers and businesses, with disruptions to travel, trading and events,' the commission said.

'The virus has many wondering what their rights and obligations are in these situations.

'The main factor that will determine each party's rights or obligations will be the terms and conditions that were agreed to at the time of the booking or transaction.'

Consumer NZ head of research Jessica Wilson said a business could not make a material change after receiving a booking and enforce terms that would disadvantage the customer, such as offering credits when it previously provided refunds for cancellations.

'Even in cases where a business could show it had a legitimate reason for amending other terms and conditions, it would still have to give you the opportunity to end the contract and get your money back,' Wilson said.

Along with airline passengers, travel agency customers have been unhappy about the rules around refunds.

A Flight Centre customer who had flights booked with Qantas was being charged a $350 cancellation fee, despite the airline offering full refunds for cancelled trips.

She was given the option of credit with Flight Centre and Qantas, or receiving a refund minus a $350 cancellation fee for her ticket.

'Seems a little strange given that the customer is liable for a cancellation fee, when the flight is cancelled by the airline rather than the customer,' she said.

'Essentially Flight Centre are sitting on full refunds from providers and profiting from the pandemic. If they are taking $350 per person on all travel booked through them, that's a huge amount of money. '

A Flight Centre spokesperson said the company was not withholding refunds from customers, but did deduct a cancellation fee on refunds for some cancellations.

A cancellation fee of $350 applied to long-haul international travel, and was disclosed to and agreed upon by the customer before booking, she said. 

Cancellation fees covered only part of the service that had been provided in terms of consulting, booking, arranging and cancelling.

Flight Centre told the customer of all the options available once it had the options from the travel provider, for example it may offer to hold a cruise or airline in credit.

'These are unprecedented times that the travel industry, along with the world, hasn't faced before. Flight Centre is dealing with an unbelievably high volume of cancellations as a result.' 

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