Qantas in hot water: Lawsuit accuses airline of deceptive practices and fund withholding
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The year 2020 proved to be challenging for nearly everyone. With national borders tightly shut, governments engaged in the blame game, and health guidelines constantly shifting, one of the most distressing consequences of this turmoil was the significant disruption to our travel plans.
As we endeavoured to navigate our options, airlines and travel agencies threw us an unexpected curveball. Instead of the much-anticipated refunds customers eagerly awaited, we were presented with the alternative of opting for travel credits.
Among the airlines that adopted this approach was Qantas.
Now, the company faces a class-action lawsuit that seeks millions of dollars in refunds and compensation for customers whose flights were cancelled after the COVID-19 outbreak.
What's behind the legal battle? Here's what we know so far.
Echo Law has taken legal action against Qantas in Federal Court, asserting that the airline deceived its customers regarding refund choices, withheld funds, and consistently engaged in what they deem is a 'pattern of unconscionable conduct'.
This move comes a month after Qantas initiated a campaign urging customers to use the airline's remaining $400 million in flight credits. It also follows closely on the heels of an announcement by Australia's consumer watchdog, signalling the imminent completion of its investigation.
With the financial backing of litigation funder CASL, the lawsuit contends that Qantas violated the Australian Consumer Law by not promptly providing refunds for flights cancelled in 2020 and retaining customers' funds without due cause.
Initially, Qantas offered customers the option of using 'travel credits with strict conditions' instead of reimbursing their payments—a course of action criticised by Andrew Paull, a partner at Echo Law.
'We allege Qantas breached the law by failing to be transparent and immediately issue refunds to customers when flights were cancelled,' he said.
'While COVID posed major disruption to air travel and resulted in cancellations that no airline wished to make, that is no excuse for Qantas to take advantage of its own customers and effectively treat them as providers of over $1 billion in interest-free loans.'
As per Mr Paull, a significant issue arising from the airline's choice to offer travel credits—rather than cash refunds—is that numerous Qantas customers have found themselves compelled to spend well beyond their initial payment to procure new tickets within the same airline.
He further noted that some might not even manage to use the credit before its expiration on December 31 of this year.
Mr Paull went as far as deeming the Qantas response as 'too little and too late'.
'That money ought to have been automatically returned to customers, in most cases more than three years ago,' he argued.
'We are seeking both refunds of all remaining credits as well as compensation for the time customers have been out of pocket.'
Qantas has taken several measures to assist customers with travel credits issued in 2020. These measures include extending the expiry date on these credits not just once but three times. In July, the airline launched a proactive campaign encouraging customers to use their flight credits.
Currently, Qantas holds approximately $400 million worth of travel credits issued during the COVID-19 pandemic. It's worth noting that Qantas and Jetstar customers have already claimed a significant portion of these credits, amounting to over $1 billion.
The travel credits vary in value, typically falling between the range of $100 to $500. Qantas offers an online tool called Find My Credit to facilitate locating and utilising these credits. This requires certain information for verification purposes:
Credit: Qantas.
The Australian Competition and Consumer Commission (ACCC) is investigating Qantas' credit and refund management. This follows a warning issued to the airline in 2020 and a subsequent complaint from the consumer group CHOICE in April 2022.
They argued that one potential explanation for the limited use of these credits was the restrictive terms set by Qantas. As reported by CHOICE, Qantas customers are only permitted to use their credits for flights of equal or higher value compared to their original fare. This rule applies to bookings made after 30 September 2021.
Consequently, if a customer wishes to book a flight at a lower cost, they must purchase an entirely new ticket. This condition has had a significant impact on a substantial number of individuals.
To illustrate, imagine having a $500 credit for a Sydney to Melbourne flight. If the flight's current price is $475 during the booking process, the credit cannot be applied—even if the customer is willing to absorb the $25 difference. In this case, the only option would be to buy a new ticket, leaving the credit unused.
Individuals holding credits for international flights also faced an additional constraint: these credits cannot be divided across multiple domestic flights if the booking was made after 30 September 2021.
According to CHOICE, this policy disregards the circumstances of customers who no longer intend to travel internationally due to factors like age or declining health.
We hope you found this article helpful and informative, folks! Do you have any remaining flight credits with Qantas? Remember, they will expire at the end of December this year, so you'd better use them as soon as possible!
As we endeavoured to navigate our options, airlines and travel agencies threw us an unexpected curveball. Instead of the much-anticipated refunds customers eagerly awaited, we were presented with the alternative of opting for travel credits.
Among the airlines that adopted this approach was Qantas.
Now, the company faces a class-action lawsuit that seeks millions of dollars in refunds and compensation for customers whose flights were cancelled after the COVID-19 outbreak.
What's behind the legal battle? Here's what we know so far.
It is alleged Qantas misled customers about their refund options, withheld funds, and engaged in a 'pattern of unconscionable conduct'. Credit: Shutterstock.
Echo Law has taken legal action against Qantas in Federal Court, asserting that the airline deceived its customers regarding refund choices, withheld funds, and consistently engaged in what they deem is a 'pattern of unconscionable conduct'.
This move comes a month after Qantas initiated a campaign urging customers to use the airline's remaining $400 million in flight credits. It also follows closely on the heels of an announcement by Australia's consumer watchdog, signalling the imminent completion of its investigation.
With the financial backing of litigation funder CASL, the lawsuit contends that Qantas violated the Australian Consumer Law by not promptly providing refunds for flights cancelled in 2020 and retaining customers' funds without due cause.
Initially, Qantas offered customers the option of using 'travel credits with strict conditions' instead of reimbursing their payments—a course of action criticised by Andrew Paull, a partner at Echo Law.
'We allege Qantas breached the law by failing to be transparent and immediately issue refunds to customers when flights were cancelled,' he said.
'While COVID posed major disruption to air travel and resulted in cancellations that no airline wished to make, that is no excuse for Qantas to take advantage of its own customers and effectively treat them as providers of over $1 billion in interest-free loans.'
As per Mr Paull, a significant issue arising from the airline's choice to offer travel credits—rather than cash refunds—is that numerous Qantas customers have found themselves compelled to spend well beyond their initial payment to procure new tickets within the same airline.
He further noted that some might not even manage to use the credit before its expiration on December 31 of this year.
Mr Paull went as far as deeming the Qantas response as 'too little and too late'.
'That money ought to have been automatically returned to customers, in most cases more than three years ago,' he argued.
'We are seeking both refunds of all remaining credits as well as compensation for the time customers have been out of pocket.'
Qantas has taken several measures to assist customers with travel credits issued in 2020. These measures include extending the expiry date on these credits not just once but three times. In July, the airline launched a proactive campaign encouraging customers to use their flight credits.
Currently, Qantas holds approximately $400 million worth of travel credits issued during the COVID-19 pandemic. It's worth noting that Qantas and Jetstar customers have already claimed a significant portion of these credits, amounting to over $1 billion.
The travel credits vary in value, typically falling between the range of $100 to $500. Qantas offers an online tool called Find My Credit to facilitate locating and utilising these credits. This requires certain information for verification purposes:
- The last name of the traveller
- The email address associated with the traveller or the travel arranger
- The booking reference (PNR) or ticket number linked to the original flight that was converted into credit
- The respective account or voucher number should also be provided for those with a Qantas Pass or Qantas TravelPass account or voucher.
Credit: Qantas.
The Australian Competition and Consumer Commission (ACCC) is investigating Qantas' credit and refund management. This follows a warning issued to the airline in 2020 and a subsequent complaint from the consumer group CHOICE in April 2022.
They argued that one potential explanation for the limited use of these credits was the restrictive terms set by Qantas. As reported by CHOICE, Qantas customers are only permitted to use their credits for flights of equal or higher value compared to their original fare. This rule applies to bookings made after 30 September 2021.
Consequently, if a customer wishes to book a flight at a lower cost, they must purchase an entirely new ticket. This condition has had a significant impact on a substantial number of individuals.
To illustrate, imagine having a $500 credit for a Sydney to Melbourne flight. If the flight's current price is $475 during the booking process, the credit cannot be applied—even if the customer is willing to absorb the $25 difference. In this case, the only option would be to buy a new ticket, leaving the credit unused.
Individuals holding credits for international flights also faced an additional constraint: these credits cannot be divided across multiple domestic flights if the booking was made after 30 September 2021.
According to CHOICE, this policy disregards the circumstances of customers who no longer intend to travel internationally due to factors like age or declining health.
We hope you found this article helpful and informative, folks! Do you have any remaining flight credits with Qantas? Remember, they will expire at the end of December this year, so you'd better use them as soon as possible!
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