Ballarat couple Leanne and Tony Nesci weathered a tough year running their small business during the pandemic.
- Many Australians are out of pocket thousands of dollars because of cancelled holidays not getting refunded
- Bipartisan support is building for legislation to improve consumer protections in the travel industry
- Travel agents say it’s a complex issue, because money paid for holidays is usually held by overseas suppliers
They say the money they were unable to recoup from a cancelled tour of Japan and Singapore — $11,300 — would have helped them enormously when business slowed during the lockdown last year.
The company they booked the travel with has offered the couple a credit rather than a refund.
Mrs Nesci, 57, is deeply frustrated.
“We paid for a service that we haven’t received and it should be in our bank account, not their bank account,” she said.
“If you pay for something and you don’t receive the service, then usually you get a refund.
“We’d been saving for a while … and, I mean, it’s not easy to find $11,000.”
The Nescis — along with 79 per cent of respondents to the Australia Talks National Survey 2021 — don’t think Australia should be opening its borders until the pandemic is under control internationally.
Mrs Nesci lives with type 1 diabetes, and even when borders reopen, she’ll feel reluctant to book a trip using their travel credit.
“We really don’t know what situation we’re going to be in next year, whether we’re going to be able to travel,” she said.
“We’ve got this credit to use by the end of next year, but we don’t know what our business will be doing next year, whether we’re going to be able to take the time off work.”
Push for change
The Nescis’ situation underlines the broader issue of travellers having trips cancelled through no fault of their own or their travel company.
The COVID-19 pandemic has exposed a gap in Australian consumer law that would normally protect a customer if they paid for something and didn’t receive it.
Normal consumer guarantee provisions are unlikely to apply if a trip is cancelled due to government restrictions.
That means the only right consumers have to a refund is through their travel company’s terms and conditions.
In the Nescis’ case, their travel company’s terms and conditions did not entitle them to a refund.
Social media is awash with similar stories of frustrated travellers denied refunds from their travel providers for trips they couldn’t take through no fault of their own.
Melbourne resident Adam Glezer runs three Facebook groups for travellers with a total of 17,000 members, and has helped hundreds of people try to get refunds.
“The reality is we don’t have the laws to protect us in situations outside of human control, such as the pandemic that we’re in now,” Mr Glezer said.
“There’s still a lot of people that are waiting on getting money back from travel companies.
“It has been months — or even in some situations, 15 to 16 months — and they still haven’t got their money.”
Tony and Leanne Nesci booked their holiday through Inspiring Vacations. The company has encouraged the couple to use their credit on domestic travel.
Inspiring Vacations told the ABC it had followed government advice at all times, as well as travel-specific advice from the Australian Competition and Consumer Commission (ACCC).
“In particular, the ACCC demands that we act with fairness,” Paul Ryan from Inspiring Vacations said.
“We feel this means, first, offering an outcome with no financial detriment, which has been provided [to customers] in the form of a credit, and, secondly, where circumstances of hardship exist, providing an option to that customer of a refund.
“The company has, as a result, issued significant refunds over the previous 15 months where notified of such hardship.”
For months, Mr Glezer has been calling for legislative change so customers can get a refund in future, if travel is cancelled due to events outside of human control.
He began contacting members of parliament to raise the issue.
He then mobilised people on social media, including the 3,500 members of one of his Facebook groups called “Travel Industry Issues — The Need for Change for Australians”.
“A number of MPs were not aware of the extent of the situation,” he said.
“I ended up calling out to my Facebook groups and asking asking for people that actually wanted to go and speak to their MPs as well so that they could actually give their own story and also explain to their MPs the importance of change.”
Travel agents the ‘meat in the sandwich’
Now, bipartisan support is building for legislation to improve consumer protections in the travel industry.
Liberal MP Kevin Andrews has put forward a parliamentary motion that will be debated in the federation chamber this evening.
“This is an area in which Australian consumer law, both at I believe a state-territory and Commonwealth level, is defective,” Mr Andrews said.
The motion suggests legislating a right to a refund, if the service a customer has paid for hasn’t been fulfilled due to “situations outside human control”.
It also raises the idea of mandatory trust accounts for travel agents and a transparent fee for service.
Finally, it would also ensure the supplier terms and conditions are clear to customers.
“This is not a go at travel agents directly,” Mr Andrews said.
“In many cases, they’re the meat in the sandwich because they’re dealing with overseas companies, they’ve on-paid fees to them and they can’t get them back themselves.
“There needs to be something in Australia just as there is in some other countries overseas, to ensure the consumer and indirectly the travel agent is protected.”
The motion has been seconded by Labor MP Michael Freelander, who has had constituents raise the issue with him in his Campbelltown office.
“Often these are people who have really scrimped and saved for their overseas holiday,” he said.
“They want their money back, but also, they want the security of knowing that if they do book a holiday in the future, that if something does happen beyond their control, then they will be able to recoup the money they’ve already paid.
“That may mean there’s a travel agent trust fund or a travel agent ombudsman that has the ability to recoup money for people who quite reasonably want their money returned.”
He said he recognised the difficulties travel agents had faced during the pandemic.
“I think also we feel very strongly about protecting travel agents as well and giving them a bit more support because from what I see, I think it’s highly unlikely our travel industry will open up completely before the middle of next year, or even longer,” Dr Freelander said.
Travel agents say there’s no need for regulation
The peak industry body representing travel agents, the Australian Federation for Travel Agents (AFTA), said re-regulating the travel industry was not the answer.
“I think what we have is adequate at the moment, it’s a deregulated environment,” AFTA’s Tom Manwaring said.
“The big pressure is coming from the refund amounts that have to come from overseas to the travel agent to go back to the customer.”
Mr Manwaring said travel agents were not holding on to consumers’ money unnecessarily.
Instead, the money was often paid in advance to overseas suppliers, such as hotels or tour operators, to confirm the booking.
Mr Manwaring said there had been industry discussions about holding money until an overseas service was delivered to the customer.
“One [thing we could look at] could be payment systems and how we could ensure at the supplier end, the funds are protected for the customer until that trip is entertained,” he said.
“That’s an interesting area to explore I think: that the agent has passed all of the money on in good faith, and then how are those funds protected for the client.”
AFTA said agents had so far successfully secured $7 billion worth of credits and refunds for their customers.
Travel agents urged to do ‘utmost’ to get money back
Mr Manwaring said the issue of possible changes to payment systems to overseas suppliers was a complex debate.
“We’ve had some discussions with Treasury and the ABA (Australian Banking Association) about the movement of funds, there’s billions of dollars involved in this at any one time,” he said.
“Where is that money sitting and what is it being used for? It’s deep in the system, and then when there’s such a flood of refunds required that the liquidity is just not there.”
Mr Glezer said he understood that travel agents weren’t all holding onto money that belonged to consumers.
But he thinks when these situations arise, travel agents should “do their utmost” to get consumers’ money back from overseas suppliers.
“In situations we’ve found that either they haven’t been doing their best to get the money back or alternatively, they haven’t even put in for a refund [to suppliers],” he said.
Inspiring Vacations said it supported any “balanced and considered measures that provide consistency around travel consumer protection”.
“These measures would need to take into account the various ways consumers purchase their travel in Australia today, such as through travel agents, online retailers and now, more and more, directly from operators,” Mr Ryan said.
“The upheaval caused by past and ongoing government-imposed travel restrictions continues to cause significant customer disruption and uncertainty as well as denying most businesses in the travel industry the ability to earn any revenue for most of the last 18 months.
“Despite this we have operated at all times with the best interests of our customers in mind and maintain market-leading customer service and response levels.”
Legislation still a long way off
Any legislation would still be some way off, according to Dr Freelander.
“It’s really up to the minister and the government as to whether they think it’s an important enough issue to take some action on,” he said.
“That’s up to the government, we hope, sooner rather than later.
“I think it’s an added layer of consumer confidence which would encourage more people to want to travel if they knew that the money was protected by some form of insurance.”
Mrs Nesci “absolutely” supports legislation to protect travellers.
“Especially when so much money is involved, we’re not just talking about a couple of hundred dollars,” she said.
“During the COVID situation last year, we were actually doing it quite tough at times and we could have used that money, had we had it.”
The Australia Talks National Survey asked 60,000 Australians about their lives and what keeps them up at night. Use our interactive tool to see the results and how your answers compare.
Then, tune in at 8:00pm on Monday, June 21 to watch hosts Annabel Crabb and Nazeem Hussain take you through the key findings and explore the survey with some of Australia’s best-loved celebrities.