Webjet cops huge fine over ‘cheap' airfares

Perth Now

2 days ago

Aussies drawn in by rock bottom airfare prices only to be hit by additional charges can take some comfort after Webjet ordered to pay a huge penalty for 'misleading' advertising.
On Monday, the Federal Court ordered online travel agency Webjet to pay $9m in penalties for making 'false or misleading statements about the price of flights and booking confirmations'.
Webjet admitted that between 2018 and 2023 it made false or misleading statements on its website, promotional emails and social media posts when it advertised airfares that excluded compulsory fees.
Webjet also admitted that between 2019 and 2024 it provided false or misleading booking confirmations to 118 consumers for flight bookings which had not actually been confirmed.
Webjet then asked for additional payments of up to $2120, for these bookings, in order for consumers to be able to complete the booking.
Webjet has now refunded these consumers.
The Australian Competition and Consumer Commission began its investigation after a consumer complained about an airfare advertised as 'from $18', which cost almost three times that price after Webjet added its compulsory fees. An example of the misleading advertising Webjet admitted to. ACCC Credit: Supplied
'We took this case because we considered that Webjet used misleading pricing by excluding or not adequately disclosing compulsory fees in its ads,' ACCC chair Gina Cass-Gottlieb said.
'Seeking to lure in customers with prices that don't tell the whole story is a serious breach of the Australian Consumer Law.'
The Webjet fees comprised the 'Webjet servicing fee' and 'booking price guarantee' fee which ranged from $34.90 to $54.90 per booking, depending on whether the flights were domestic, to New Zealand and the Pacific, or other international destinations.
While Webjet's website, app and most emails contained information about the additional fees, some users had to scroll to the fine print near the bottom of the screen to see them. In its social media posts, Webjet didn't disclose the additional fees at all. Example from Webjet website advertising 'from $100' getaways. ACCC Credit: Supplied
In a statement from February, when the ACCC agreement was initially approved, Webjet said 'it is important to note that, since being advised of the issues of concern by the ACCC in November 2023, Webjet Marketing has voluntarily and proactively implemented improvements to its fee disclosures'.
'Webjet Group is confident that any customer concern with its offering, disclosure, service or pricing was limited,' the statement said.
'[Webjet] has always prided itself on its high levels of trust with all customers and stakeholders and has fully co-operated and positively engaged with the ACCC to resolve this matter.'
The ACCC found that in the relevant period of late 2018 to late 2023 the Webjet fees represented 36 per cent of the company's total revenue.
The matter was resolved outside of court when Webjet and the ACCC agreed to settle on the conditions that Webjet:
'pay a proposed total penalty of $9m; publish a corrective notice in a form agreed with the ACCC for a period of 60 days; review, maintain and continue to implement an Australian Consumer Law compliance program in an agreed form; and contribute $100,000 to the ACCC's costs'.