Federal Court fines Jetstar $2m over misleading refund claims

The budget airline, owned by Qantas, has admitted it wrongly told passengers some fares were not refundable and refunds were only available to passengers who bought more expensive fares.

But under Australian consumer law, passengers whose flights are cancelled or significantly delayed due to reasons within the airline’s control are entitled to refunds.

The Federal Court has fined Jetstar $1.95 million in penalties over the claims, which were made on its website between April 2017 and March 2018.

The Australian Competition and Consumer Commission launched legal proceedings against Jetstar over the claims in December.

“Jetstar’s representations were false or misleading because all flights come with automatic consumer guarantees that cannot be excluded, restricted or modified, no matter how cheap the fare,” ACCC chair Rod Sims said.

“If a flight is cancelled or significantly delayed, passengers may be entitled to a refund under the consumer guarantees. All consumers have the right to a remedy, such as a refund, if services are not supplied within a reasonable time.

“Businesses simply cannot make blanket ‘no refunds’ statements because they can mislead consumers into thinking they can never get a refund under any circumstances.”

Jetstar previously said it had updated the terms and conditions on its website to be clearer about passengers’ refund rights in light of an ACCC crackdown on Australia’s four major airlines and their refund policies.

It said it made changes to wording and added information about consumers’ legal rights when flights were delayed and cancelled.

Jetstar, Qantas, Virgin Australia and Tigerair Australia have said they will ensure their policies and practices comply with consumer law.

A Jetstar spokesperson said in a statement: “We take our obligations under Australian Consumer Law seriously and it was never our intention to mislead customers about the circumstances in which they could claim refunds.

“We worked closely with the ACCC during its review and in July last year made changes to our website and our conditions of carriage, to make sure it’s clear when customers are eligible for a refund.”