Jetstar hit with $1.95 million fine for lying to customers about non-refundable cheap tickets

AUCKLAND, NEW ZEALAND – JUNE 18: New Zealand Prime Minister John Key (R) and Qantas chief executive Allan Joyce (L) pose with a model plane at the Sofitel on June 18, 2015 in Auckland, New Zealand. Jetstar, which is owned by Qantas, have announced that the low-cost airline will introduce domestic expansion plans across New Zealand. (Photo by Phil Walter/Getty Images)
  • The Federal Court has ordered Jetstar to pay $1.95 million in fines following breaches of the Australian Consumer Law.
  • The Qantas-owned airline was found to have made “misleading or deceptive” statements on its website indicating customers were not entitled to refunds in a bid to push them into more expensive fares.
  • Qantas and Jetstar, as well as rivals Virgin Australia and TigerAir, have entered into enforceable undertakings with competition regulator the ACCC.

Ever been shaken down at a budget airline counter for that pesky extra baggage or leg room? Well now it’s Jetstar’s time to pay up.

The Qantas-owned airline has been ordered to pay $1.95 million in penalties to the government after the Federal Court of Australia found it engaged in false and misleading conduct.

In 2018, Jetstar admitted it presented fares on its website as not refundable even though customers were entitled to them and charged more for refundable fares.

In a judgment handed down on Thursday, the court ruled that Jetstar has contravened Australian Consumer Law by making “misleading or deceptive representations” on its website relating to customer refunds.

The false statements claimed that refunds would not necessarily be granted for certain flights even though the law contains automatic guarantees. Competition watchdog, the ACCC, which brought the case against Jetstar, said the budget airline was trying to push customers into a “more expensive fare”.

“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 in a statement welcoming the court’s decision.

“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 admitted liability for the misconduct in December 2018 when the ACCC first brought the case and pledged to amend its policies and practices. The ACCC notes that “a number of improvements” have been made.

While the Commonwealth will pocket the almost-$2 million fine, Jetstar has also agreed to review customer complaints about flight delays and cancellations between 10 April 2017 and 13 March 2018, with refunds on the cards.

Jetstar’s parent company Qantas, as well as Virgin Australia and Virgin-owned Tigerair have already been in the firing line, entering into enforceable undertakings with the ACCC for similar breaches of the consumer law.

Business Insider Australia has sought comment from Jetstar.

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