'Opt-out' fees probe reaches Jetstar
ComCom investigation comes after Air NZ was warned for the same thing earlier this year.
Jetstar is now being investigated by the Commerce Commission for using ‘opt-out’ pricing, after Air New Zealand [NZX:AIR] was warned for the same thing earlier this year.
A Commerce Commission spokesman confirmed to NBR ONLINE it began looking into Jetstar’s use of the practice – which adds extra charges, such as credit card fees, throughout the booking process onto an advertised fare – at the beginning of this month.
In particular, a $10.95 insurance fee is added automatically – meaning the customer has to opt out if the extra cost is not wanted.
Air New Zealand said it would scrap the practice from this month, after receiving a warning letter from the commission which says pre-ticked boxes for flight insurance, or any other add-on requiring an ‘opt-out’ to avoid purchase, can be misleading and may be a potential breach of the Fair Trading Act.
At that time, Jetstar told NBR it had no plans to drop opt out travel insurance for online flight bookings, with a spokesman saying its travel insurance was “much more clearly presented” than in Air NZ’s booking process.
“Pre-selection can alert travellers to services such as travel insurance or checked baggage that they may not have considered. If they don’t want it, they just tick a button and continue with their booking.”
The spokesman said a customer has a 14-day window to tell the airline they had not realised insurance was pre-ticked and, if no claim had been made, the money would be refunded.
The Australian corporate regulator is also prosecuting Jetstar and Virgin in Australia for not referring to similar booking fees when the fare is first stated in the booking process.
It would be difficult for Jetstar to drop the opt-out charges in New Zealand while defending the prosecution in Australia, lawyer Michael Wigley suggests.
Calida Smylie
Tue, 21 Apr 2015
Tue, 21 Apr 2015
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'Opt-out' fees probe reaches Jetstar
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