STA Travel sued: ACCC takes court action over ‘false’ flexi-pass claims

It’s the ultimate up-sell for indecisive travellers: a “MultiFlex” pass that lets you change your flights without those pesky extra charges. There’s just one big problem, the competition cop says.

AUSTRALIA’S competition watchdog has sued STA ­Travel, alleging the European-owned travel agent made false or misleading claims in ­relation to a popular travel product.

The Australian Competition and Consumer Commission has commenced Federal Court proceedings against the travel giant, focused on its so-called MultiFlex Pass.

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It alleges STA Travel has generated more than $12 million revenue since 2011 by misrepresenting in advertisements that customers who changed their flights after purchasing MultiFlex passes would not pay any fees or charges.

STA Travel misrepresented that customers would only be charged the differences in the costs of their airfares, as well as taxes, the ACCC says.

STA Travel has chalked up $12 million in sales from its MultiFlex passes since 2011, the ACCC says. Picture: Jenny Evans

It alleges the travel agent in fact charged many consumers hidden commissions and other fees on top of the differences in airfares and taxes and, in some cases, where there were no differences in airfares and taxes.

“We were particularly concerned about STA Travel’s advertisements because they explicitly said MultiFlex Pass consumers would avoid fees for date changes,” ACCC commissioner Sarah Court said.

“Some advertisements, for example, said that the MultiFlex Pass allowed consumers to purchase date changes ‘upfront’, to ‘prepay’ for date changes, or to make ‘fee free’ or ‘no fee’ date changes.

“However, we allege that some consumers were paying STA Travel hundreds of dollars in hidden commissions and other fees that they were never told about.

ACCC commissioner Sarah Court.

“Many consumers who thought they were being prudent by purchasing an add-on to avoid high fees were instead worse off.”

Nearly two-thirds of STA Travel consumers who used their MultiFlex passes to change flights were charged extra commissions or other fees, according to the ACCC allegations.

“Additional commissions or other fees totalling more than $1 million were collected by STA Travel since 2011 from consumers using a MultiFlex Pass to make date changes,” the ACCC said.

An STA Travel spokeswoman said yesterday that the group had been “assisting the ACCC in its investigation, and endeavouring to address and resolve its concerns about how we market and promote our MultiFlex Pass”.

“Obviously, we are disappointed that the ACCC has now decided to issue legal proceedings against us,” she said.

STA Travel says it will also contact affected customers in future regarding the implications of the ACCC’s proceedings once those proceedings have been resolved. The ACCC is seeking penalties, injunctions, costs and other orders against STA Travel.