Proceedings have begun against STA Travel after the Australian Competition and Consumer Commission alleged the company made misleading claims in relation to its MultiFLEX Pass product.
According to the STA Travel website, MultiFLEX is an airfare add-on which “allows you to change your flights without having to pay the airline or agent fees every time your plans change, saving you hundreds”.
“With MultiFLEX we’ll waive ALL the date change fees, so you’ll just pay the difference in airfare and taxes - if there are any,” it reads.
The ACCC alleges that, since September 2011, STA Travel misled consumers via advertisements showing a customer who changed the date of their flight after purchasing a MultiFLEX Pass would not pay any fees or charges, or would only be charged the difference in the cost of the airfare and applicable taxes.
According to the ACCC, STA Travel allegedly charged many consumers hidden commissions and other fees on top of the difference in airfare and taxes, and in some cases even where there was no difference in airfare 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.
“Many consumers who thought they were being prudent by purchasing an add-on to avoid high fees were instead worse off.”
STA has made more than $12 million from the sale of MultiFLEX Passes since 2011, the ACCC alleges, and nearly two thirds of the consumers who used their MultiFLEX Pass to change flights were charged extra commissions or other fees.
Additional commissions or other fees arising from date changes made through a MultiFLEX pass since 2011 totalled over $1 million.
The ACCC is seeking penalties, injunctions, costs, and other orders against STA Travel.
STA Travel said it was “disappointed that the ACCC has now decided to issue legal proceedings against us“ and, given that the allegations are now subject to legal proceedings, “it is not appropriate for us to comment on the substance of the allegations or our responses to them at this time”.
However, the company said it 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”.
“We wish to emphasise that we will continue to work to further improve how we market and promote our products and services to customers, and to ensure we maintain best practice within the travel industry.”
STA Travel has invited customers who have queries regarding their purchase of the MultiFLEX product to contact the customer cares team on 1300 676 264.
“We will also contact affected customers in future regarding the implications of the ACCC’s proceedings once those proceedings have been resolved.”
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