ACCC takes Webjet to court over allegedly misleading customers about airfares

The consumer watchdog says Webjet breached consumer law over ‘undisclosed fees’ on airfares and questionable booking practices.

The consumer watchdog is now going after Webjet, alleging the travel booking site made false and misleading representations to consumers about flight prices and bookings.

The Australian Competition & Consumer Commission said Webjet breached the consumer law, when it made statements on its app, in marketing emails and social media as well as on its website about the minimum price of airfares which omitted compulsory fees charged by the online travel agency.

“The statements included ‘flights from $x’ when the price quoted excluded Webjet’s compulsory ‘Webjet servicing fee’ which ranged from $34.90 to $54.90 a booking depending on whether the flights were domestic, trans-Tasman or trans-Pacific or other international flights,” said the ACCC.

“These statements were made for various periods of up to five years between November 2018 and November 2023.”

The ACCC said the fees were not disclosed in Webjet’s social media posts, but the website, app and promotional emails did contain some information.

“It was typically only accessible by scrolling towards the bottom of the relevant screen, was in fine print and not sufficiently clear or prominent,” said the ACCC.

Proceedings against Webjet have been launched in the Federal Court as the ACCC “prioritised consumer and competition issues in the aviation sector as well as conduct in the digital economy”.

ACCC Chair Gina Cass-Gottlieb said they knew how much Australian consumers valued air travel to stay connected for work, leisure or to visit family.

“During this time of cost pressures, many consumers are carefully considering travel arrangements and seeking to save money,” she said.

“A statement about the lowest price must be a true minimum price, not a price subject to further fees and charges before a booking can be made.”

Webjet acknowledged the ACCC announcement and said the company was cooperating with the commission.

“Webjet Marketing has already voluntarily and proactively undertaken a number of steps to further improve its disclosure of pricing and fees,” said a statement from the company.

“So far as Webjet Marketing is aware, the ACCC concerns do not relate to its current fee disclosure and pricing practices.”

Webjet CEO John Guscic.

Webjet was also alleged to have breached consumer law by displaying a confirmation page online and sending a confirmation email after taking payment for a completed flight booking when in fact, in respect of 382 bookings, it had not booked the flight with the airline.

The ACCC said in these cases, Webjet later allegedly sought additional payment from the consumers to complete the booking, or offered the consumer a refund for the flight, despite having earlier confirmed the booking.

“Some consumers may have made and paid for other travel arrangements on the basis of the confirmation so may have had to choose between paying more money or cancelling other arrangements at a potential loss,” said the ACCC.

“We are very concerned about this alleged conduct by Webjet, which represented to consumers that their flight booking had been confirmed and left some consumers in the position of having to pay more to later complete the booking,” Ms Cass-Gottlieb said.

“We remind all businesses, whether they are online retailers or bricks and mortar stores, that they need to comply with the Australian Consumer Law by not misleading consumers and displaying prices clearly, including hidden fees and surcharges.”

The ACCC is seeking pecuniary penalties, declarations, injunctions, consumer redress, costs and other orders.

The Webjet company recently underwent a demerger, separating its wholesale hotels business WebBeds from the online travel agency and motorhome rental business.

Half year results for the company reported to the ASX on Wednesday, were accompanied by the announcement of a $150m share buyback, that lifted the Webjet share price by 14 per cent.

The ACCC launched action against Qantas in 2023, over the sale of tickets on already cancelled flights during 2022. The two parties reached a settlement of $120m, including a $100m fine and $20m in compensation for affected customers.