New law to fight against travel 'rip-offs'

AUSSIES given power to fight back against unfair practices by airline and rental car companies.

Video still of angry passengers in Seven Network's new reality TV show Air Ways / Renee Nowytarger

AUSTRALIAN travellers will now be able to fight back against any unfair airline and car hire practices due to a landmark new consumer law.

The Australian Consumer Law has been dubbed a “once-in-a-generation reform to consumer law” and is set to overhaul the travel industry.

Passengers affected by overbooking or those struggling to claim airfare refunds are just a few who will benefit.

The new law introduces the fairness test, which measures a condition imposed by an airline or a rental car company and judges whether it is “unfair” to the consumer.

"A term is unfair if there is an imbalance in the parties' rights, it is unnecessary to protect the supplier and the customer would cause detriment to the customer if enforced,” David Howarth, Strategic Policy Officer with consumer organisation Choice, said.

“Consumers can challenge those terms but more importantly, the Australian Competition and Consumer Commission (ACCC) can also take class actions.”

Companies that continue to breach the fairness test have been warned to brace themselves for the possibility of court action.

The landmark law will help to even up the balance between companies and consumers, Mr Howarth said.

Airlines are expected to be particularly affected by the new law.

Choice also predicts that rental car companies will come under fire for certain contract terms such as charging customers for the full value of any damage despite insurance provisions.

The new law is expected to empower travellers, who have long been complaining about certain policies that they believe are unfair but have been left with few options to push for change.

Traveller John Wass’s “nightmare” battle with Tiger Airways last year over a refund highlights the difficulties holidaymakers face when dealing with airlines.

Mr Wass was forced to re-book his family on another carrier at an extra expense of $610 after his flight was rescheduled – 22 hours late.

In addition, travellers flooded news.com.au with stories of hire car disasters after a tourist told of his $8000 rental car “rip-off”.

Paul Douglas-Denton was billed by Europcar for towing his rental car approximately 300 kilometres after vandals smashed the vehicle overnight outside his hotel.

The company said the right to claim the money was contained in the fine print of the contact, but were forced to back down by the Northern Territory’s consumer affairs commissioner.

It will take time to overhaul the industry, but travellers now have more support from the ACCC due to the new law, Mr Howarth said.

“For individual consumers it’s always going to be a challenge to assert your rights. One of important changes under the new law is the ACCC’s ability to take action on behalf of a number of consumers and establishing changes.” 

For more information on the new Australian Consumer Law visit consumerlaw.gov.au.