Ticket cancellations and refunds: Consumer Protection Act is still untested

2013-08-21 00:00

WHEN the Consumer Protection Act came into force, consumer activists breathed a sigh of relief that the historically abused SA consumer would now be protected.

But while true in theory, consumers still find themselves fighting many an uphill battle, not least in the travel industry when it comes to the right to cancel and be refunded for advance airline ticket bookings.

Section 17 of the CPA, which deals with cancellations, refunds and penalties, gives consumers the right to cancel an advance reservation, booking or order, and suppliers the right to impose a “reasonable” cancellation penalty.

But the definition of reasonable is contentious and it seems still needs be tested in court.

The following case highlights the problem. Paul Romeril of Hillcrest found himself facing an unbending Pavillion Flight Centre, citing SAA’s “ticket rules” after cancelling a ticket for a friend who would no longer be travelling with the family to London in December. He paid R13 487 for the economy class ticket on June 14 and when he wanted to cancel it on August 7, he was shocked to receive an e-mail from Flight Centre offering a R5 400 refund of airport taxes but pointing to the sale terms and conditions, saying the ticket price was not refundable and the cancellation fee could be up to 100%.

CANCELLATION

Horrified, and understanding he had a right to a refund, Romeril sought legal advice that confirmed his view. He sent his lawyer’s letter to Flight Centre.

“I found it very unfair because I’m cancelling the tickets five months in advance, it’s not like it’s two weeks before the flight,” Romeril complained.

“December is a busy period and the airline would easily be able to resell the ticket.”

However, Flight Centre’s area leader Tarryn Mitchell disagreed.

“The airline stipulates the rules of their fares and the fare that was purchased is a non-refundable ticket, which you were made aware of when purchasing the fare,” she replied to him. “As a third party we are bound by the rules of the airline and make sure our clients understand the rules.”

Romeril said he had read the agreement but was not sure who was “legally correct” because his attorney had advised that he was entitled to a refund subject to a “reasonable” penalty.

Romeril turned to me for help and I asked Flight Centre whether it would reconsider refunding him in light of the CPA’s definition of a “reasonable” fee and the long notice period.

REASONABLE

The CPA describes a cancellation fee as “unreasonable if it exceeds a fair amount having regard to the nature of the goods or services that were reserved or booked; the length of notice of cancellation provided by the consumer; the reasonable potential for the service provider, acting diligently, to find an alternative consumer between the time of receiving the cancellation notice and the time of the cancelled reservation; and the general practice of the relevant industry”.

Where a consumer is unable to honour a booking due to death or hospitalisation, suppliers may not impose a cancellation fee.

However, Mitchell declined, saying it was “general practice” for airlines to sell non-refundable, non-transferable tickets.

“If clients purchase the cheapest airfare, the airfare rules will most probably be very restrictive … We believe that we are compliant with the CPA,” Mitchell said.

“If Mr Romeril purchased the more expensive ticket offered to him, he could have cancelled and received a refund up to 100%. The client had the option to do a date change and travel at a more suitable time.”

However, Romeril argued that he had not been given price options. South African Airways spokesperson Tlali Tlali also referred to the airline’s “rules”, saying they did not prescribe a refund in such cases but that the airline complied with the CPA.

“SAA conducts its business operations in line with globally acceptable standards and regulations that are prescribed by reputable airline and aviation regulatory organisations.” He added that only in the case of a purchase after direct marketing such as via e-mail, did the airline allow a five-day cooling off period in which tickets would be refunded.

Association of South African Travel Agents president Claude Vankeirsbilck said agents were “totally reliant” on airline rules. “There is an obligation on the consumer to understand the airline ticket rules and regulations when they purchase a ticket,” Vankeirsbilck said.

COMPLIANT

Asked whether he believed the rules were CPA compliant, especially when a consumer provides a long notice period, Vankeirsblick said: “Ultimately, it’s the interpretation of the act itself and I don’t believe it has been tested in the court of law so I can only assume they are compliant. The Consumer Tribunal is there to test it and I can only make the assumption that they are compliant until such a day as the commission finds that they are not.”

Former national consumer commissioner Mamodupi Mohlala-Mulaudzi cracked down on this issue in 2011, saying airlines had to comply and provide refunds where tickets were issued locally. However, the no-refund practice has continued.

Romeril has lodged a complaint with the commission, which had not responded to questions at the time of going to print last night.

Send your comments to consumer@3i.co.za

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