STA Travel cops hefty fine for misleading travel pass promotion
STA Travel has been hit with a big fine after action by Australia’s consumer watchdog.
A court ordered STA to pay A$14 million in penalties for false or misleading advertsising
The company sold the MultiFLEX Pass, which when an optional extra was purchased, allowed flight changes without any extra fees or charges.
The Australian Competition and Consumer Commission found this not to be the case.
The $149 pass was sold over a five year period from 2014.
"Consumers were misled into purchasing the MultiFLEX Pass on the representation that they would not have to pay anything further for date changes to their flights, when, in fact, STA often charged consumers hundreds of dollars for changing their flights," ACCC Commissioner Sarah Court said.
These additional fees were not the same as fees imposed by the individual airline.
In almost one in four cases, the additional fees demanded by STA was double the fees payable to the airline.
"In 12% of cases, STA Travel charged MultiFLEX Pass customers to make a change to a flight although the airline itself had not charged STA Travel anything at all for the change," Court said.
STA Travel admitted liability.
"We are sorry that certain advertisements appeared to be misleading and took corrective measures, such as a new ticket change policy and stricter approval procedures for promotional material," STA Travel CEO Casper Urhammer.
"We do, however, consider the penalty as excessive in relation to the specific claim," he said.
"These penalties serve as a timely reminder to all travel businesses that they must not misrepresent the costs applicable when travel services are changed."
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Editor for TravelMole North America and Asia pacific regions. Ray is a highly experienced (15+ years) skilled journalist and editor predominantly in travel, hospitality and lifestyle working with a huge number of major market-leading brands. He has also cover in-depth news, interviews and features in general business, finance, tech and geopolitical issues for a select few major news outlets and publishers.
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