The consumer advocacy group, Consumer New Zealand, lodged a complaint with the Commerce Commission against the accommodation booking sites Airbnb and Bachcare over how they charge people who cancel bookings.
The Consumer NZ finds it a breach of the Fair Trading Act as the site's policies are unfairly biased towards the service provider and resulted in many customers losing a massive amount of money.
Consumer NZ receives many complaints against the websites
Chief executive, Consumer NZ, Jon Duffy finds it "plainly unfair" that the companies denied a full refund to the travellers who could not travel because of the pandemic induced lockdown.
The consumer advocacy group is calling for these companies to be taken to court on their cancellation policies. The Group has received many complaints from the consumers who could not travel due to the second lockdown in Auckland.
These websites charged extortionate fees to those who booked accommodation out of the country but cancelled it later as they could not travel to their respective destinations due to the COVID-19 restrictions.
These sites are charging steep fees if consumers want to cancel their accommodation. Also, in some cases, they are charging the entire amount they have paid for the booking.
The trips are cancelled due to the government restrictions where people can't go to travel as per their plan, so definitely it is not travellers fault, and the way the sites are exploiting the situation looks that they are breaching the Fair Trading Act.
Image Source: ©Kalkine Group 2020
Consumer NZ urges Commerce Commission to take Airbnb to court
As per one of the sections of the Fair Trading Act's, if normal consumer contracts are imbalanced in favour of one party over another, then they are unfair.
In such cases, the Commerce Commission can take these companies to court to have those provisions struck down. Consumer NZ has said that right now when there are chances of potential further lockdowns, the Commission should act and take Airbnb to court on these policies.
There have been instances where the accommodation provider, Airbnb charged 100 per cent of fees to the person cancelling them even where it was done in a circumstance to give sufficient time for the accommodation provider to make the property available again.
In several of such instances, the accommodation provider could successfully charge twice for the same property, and the first consumer gets penalised for not using their property. Thus, the policies are proving harsh on consumers’ pocket.
Airbnb allows hosts listing on its site to use cancellation policies, which results in the consumer who cancels the accommodation lose 50 per cent to 100 per cent of the accommodation fee even in the case where they give reasonable notice that they need to cancel the trip. However, when Airbnb host wanted to cancel a booking, the maximum they get charged by Airbnb was NZD 145.
Bachcare's policies were comparatively stricter, which states that the customer would lose all accommodation fees and the service fee, even when they cancel two months before starting their stay.
Consumer NZ questioned these entities whether they reviewed their terms for compliance with the Fair Trading Act and received no satisfactory answers.