STA Travel’s MultiFLEX fares were misleading, court rules
The world’s biggest student travel company has been ordered to pay a $14m fine over misleading flexible fare promotion.
The world’s largest student and youth travel company, STA Travel, has been hit with a $14m fine over the false and misleading promotion of its MultiFLEX Pass product which allowed travellers to change their flights multiple times.
STA Travel admitted before the Federal Court that for more than five years it made misleading representations in its MultiFLEX Pass advertising that consumers who bought the airfare add-on could change their flights without paying fees or charges, according to a statement from the Australian Competition and Consumer Commission.
In many cases, STA Travel’s charges were not reflective of additional fees imposed by the airline, the corporate watchdog said. “For example, in almost a quarter of cases where a customer was charged extra by STA Travel, the amount was more than double the additional airfare and tax imposed by the airline,” the ACCC said.
“These penalties serve as a timely reminder to all travel businesses that they must not misrepresent the costs applicable when travel services are changed,” said ACCC Commissioner Sarah Court in a statement yesterday.
Ms Court said that in 12 per cent of cases, STA Travel charged MultiFLEX Pass customers to make a change to a flight although the airline itself had not charged STA Travel anything at all for the change.
“Consumers were misled into purchasing the MultiFLEX Pass on the representation that they would not have to pay anything further for date changes to their flights, when, in fact, STA often charged consumers hundreds of dollars for changing their flights,” Ms Court said.
STA was still promoting $99 MultiFLEX pass yesterday morning saying the average traveller changes their dates on a round the world trip five times.
STA Travel admitted liability and made joint submissions with the ACCC to the Federal Court. STA Travel will also contribute to the ACCC’s legal costs.
The MultiFLEX Pass cost up to $149 to purchase upfront. Between 2015 and 2019, STA Travel estimates it sold on average approximately 16,000 MultiFLEX Passes annually.
STA Travel, a national supplier of travel and tourism services targeting students and young people, could not be reached for further comment yesterday.
The ACCC initiated proceedings against STA Travel in March 2019.
STA Travel promoted the MultiFLEX Pass via multiple channels including its website, brochures and flyers, in store posters, and a YouTube video.
The ONEFlex pass cost $49 and allowed one flight change; the 3 change pass or Multifles pass cost $99 allowing three flight date changes while the unlimited cost $149.
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