The Australian Competition & Consumer Commission (ACCC) has commenced legal proceedings against STA Travel for allegedly making false or misleading claims in advertisements.
STA Travel will face the Federal Court for allegedly misleading consumers with its MultiFLEX Pass – a product that’s marketed as a buyable airfare add-on for consumers that allows them to change the date of their flights without paying fees or charges.
The ACCC alleges that since September 2011, the agency group has advertised the product to its customers by claiming that if they purchase the MultiFLEX Pass and later change their flights, they would only be charged the difference in flight costs and applicable tax.
However, the Aussie watchdog accused STA Travel of charging customers commissions and other fees on top of the difference in airfare and taxes, despite purchasing the airfare add-on.
In a statement, the ACCC said it is seeking penalties, injunctions, costs, and other orders for allegedly making $1 million from the two-thirds of the consumers who bought the MultiFLEX Pass and were charged additional commissions or other fees.
Sarah Court, ACCC Commissioner, said there’s concern that STA Travel customers were paying 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.”
Sarah Court, ACCC Commissioner alleges
STA Travel responded to the case, saying that it is disappointed with the ACCC’s decision to go to court considering the brand has been working closely with the watchdog to address and resolve any issues.
“Obviously, we are disappointed that the ACCC has now decided to issue legal proceedings against us,” a statement from STA Travel read.
“As the ACCC’s allegations are now the subject of legal proceedings, it is not appropriate for us to comment on the substance of the allegations or our responses to them at this time.”
The brand continued, emphasising that it will continue to work on improving how it markets and promotes its products and services to customers and to “ensure we maintain best practise within the travel industry”.
“Customers who have queries regarding their purchase of the MultiFLEX product are invited to contact our 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.”
The ACCC believes that STA Travel has generated revenue of over $12 million from the sale of MultiFLEX Passes since 2011.
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