The Federal Court has ordered Airbnb to pay some 63,000 eligible consumers as much as $15 million in compensation as well as up to $15 million in fines after the company admitted to misleading Australians about the currency of accommodation prices for nearly four years.
Airbnb acknowledged that it made false or misleading representations to Australian users from January 2018 to August 2021, wrongly indicating that prices for Aussie accommodation were in Australian dollars when in reality these costs were in US dollars for tens of thousands of consumers.
The short-term accommodation provider acknowledged that during this period, it showed prices for Australian stays on its website with a dollar sign, without making it clear that meant US dollars.
During that period, an Australian customer who believed they were paying AU$500 for a booking would have instead been slugged with almost AU$700 before conversion fees.
In total, more than 70,000 bookings were billed in USD.
According to the Australian Competition and Consumer Commission (ACCC), Airbnb received more than 2,000 complaints from Aussie consumers about being charged in greenback during that time.
The Federal Court found that Airbnb told these customers that they had chosen to view prices in USD, even though many users had not made that selection themselves.
The Airbnb platform was designed to display prices in Australian dollars for users accessing it in Australia unless they manually chose a different currency. But the website led many local consumers to see prices and incur charges in US dollars.
The accommodation provider eventually changed its platform from 31 August 2021 to clearly show prices in US dollars through the use of the abbreviation ‘USD’.
“Consumers were misled about the price of accommodation, reasonably assuming the price referred to Australian dollars given they were on Airbnb’s Australian website, searching for accommodation in Australia and seeing a dollar sign,” ACCC Chair Gina Cass-Gottlieb said.
“By paying in US dollars, these consumers were charged more than they expected to pay, and were deprived of a chance to make an informed decision about whether to make the booking because of this misleading conduct regarding the price.
“Affected consumers ultimately paid significantly more than they expected to pay because of the prevailing USD/AUD exchange rate at the time. Some users also paid additional charges to their banks as a result of paying in a foreign currency.”
Cass-Gottlieb added, “We took this case to send a strong signal to large digital platforms like Airbnb that they must comply with the Australian Consumer Law and not mislead consumers”.
“We are pleased with the undertaking by Airbnb to pay compensation, which provides a meaningful outcome for the affected consumers.”
The ACCC expects the average compensation payment to be about $230 per consumer, although this could vary depending on the exchange rates at the time.
How compensation will work
It also warns the public of scammers pretending to make contact on behalf of Airbnb or Deloitte Australia, which is administering the compensation claims for Airbnb.
“Eligible consumers will be contacted by Airbnb within the next 45 days and invited to lodge a claim, but they can also contact Airbnb to ask about their claim if they think they are eligible for compensation and have not been contacted by that date,” Cass-Gottlieb said.
Affected consumers will receive an initial communication from Airbnb through email and text messages. This message will prompt them to log in to their Airbnb accounts for additional details on how to submit a claim.
Airbnb aims to reach out to all affected consumers with information about the consumer redress scheme by 5 February 2024.
