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Consumer NZ asks Commerce Commission to review Airbnb and Bachcare’s cancellation fees
November 23, 2020
Accommodation booking sites Airbnb and Bachcare are in the gun for cancellation terms that leave some customers hundreds of dollars out of pocket.
Consumer NZ is lodging a complaint today with the Commerce Commission, requesting it take court action against the two accommodation booking sites for their use of unfair cancellation terms.
Consumer NZ chief executive Jon Duffy said the booking sites’ heavy-handed policies had resulted in some customers being hundreds of dollars out of pocket.
Complaints to Consumer NZ about the sites have risen since the last Covid-19 lockdown in August.
“Consumers who had booked accommodation but couldn’t travel because of the lockdown told us they’d been denied a full refund. Even though they couldn’t use the accommodation, through no fault of their own, they were informed they wouldn’t get their money back. That’s plainly unfair,” Duffy said.
Consumer NZ reviewed the booking sites’ cancellation policies and believed they risk breaching the Fair Trading Act, which bans unfair terms in consumer contracts.
The sites’ customers can face steep fees if they need to cancel, in some cases forfeiting the entire amount they’ve paid.
Duffy said Airbnb allows hosts listing on its site to use cancellation policies that can result in customers losing 50 to 100 per cent of the accommodation fee, despite giving reasonable notice they need to cancel.
In contrast, if an Airbnb host wanted to cancel a booking, the most they could be charged by Airbnb was $145.
Bachcare’s standard terms were even harsher, he said.
Its cancellation policy states the customer will lose all accommodation fees and the service fee, even if they cancel 60 days before the start of their stay.
“In our view, these charges are excessive. If an accommodation provider imposes a cancellation fee, it can’t just charge whatever it wants. Companies must have a legitimate basis for their fees and take into account the fact the property could be relet to another customer. It’s hard to argue the fees being charged to Airbnb and Bachcare customers are in any way justified.”
Consumer NZ asked Airbnb and Bachcare whether they’d reviewed their terms for compliance with the Fair Trading Act but didn’t get satisfactory answers, Duffy said.
In its complaint, Consumer NZ has asked the Commerce Commission to seek a court declaration that the cancellation terms are unfair. Any term the court deems unfair can’t be enforced by the trader.
Duffy advises consumers who believe they’ve been charged an unfair cancellation fee to make a complaint to the Commerce Commission.