Pauline and Christy’s cancelled US trip left them with a $4,500 flight credit they couldn’t use

Pauline Harbaugh and her US-born wife Christy have been separated from their family overseas for more than two years. 

Key points:

  • Travel credits issued in 2020 may be expiring soon
  • Consumers want to see flight credit schemes improved
  • Experts call for stronger regulations and law reform

The couple would normally visit them every year, but the COVID-19 pandemic saw their international flights cancelled, leaving them with more than $4,500 in flight credit.

"[Christy's] grandma passed away during COVID, we didn't get a chance to see her, that was really tough," the Melbourne resident told the ABC.

"Lots changes really quickly, everybody's getting older, we're missing some really important times with family."

Their return flights from Melbourne to the US, which were booked in January 2020 with Virgin Australia, were later cancelled in August due to COVID restrictions.

Ms Harbaugh said her initial request for a refund was refused and she was later offered a travel credit after months of chasing up with the airline, the travel insurer and her credit card provider.

She also complained to the Australian Financial Complaints Authority and the US Department of Transport, but they were unsuccessful in helping her to obtain a refund.

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Virgin Australia said it does not refund cancelled flights for bookings made before April 20, 2020, when the company entered voluntary administration, as bookings made prior to that date were impacted by the insolvency laws. 

"It's been really tough. It feels like it's been unnecessarily difficult," Ms Harbaugh said, adding that she and her wife have been long-term travellers with the airline.

"We've invested a lot of money flying with Virgin [Australia], and we really didn't shop around as customers, it left a really bad taste in our mouth."

She said she was unlikely to use the flight credit in time, which is mid-2022, but her request for an extension was also rejected.

"A lot of the time that we've had those flight credits living in Melbourne, we've been in lockdown, so we haven't had a chance to actually even fly domestically," she said.

"They certainly aren't providing or offering US flights at the moment, so we can't use them even if we wanted to.

"We are disappointed that we have had to carry this debt."

A surge in travel-related complaints

Like Ms Harbaugh, hundreds of thousands of Australians are sitting on flight credits after their plans were disrupted by the pandemic and subsequent outbreaks and travel restrictions. 

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Many are facing confusion and frustration in dealing with refunds and flight credits for ill-fated holidays. Many travel credits issued in 2020 may be expiring soon.

However, there is little regulation or consumer protection in how airlines deal with their customers in these circumstances.

It has caused a surge in complaints and many customers are finding it hard to claim their credits, with the risk that millions of dollars are lost to travellers through unclaimed credits.

Consumer watchdog, the Australian Competition and Consumer Commission (ACCC), has received a record number of travel-related complaints since the start of the pandemic.

The ACCC recorded 26,412 complaints in 2020, a 450 per cent increase compared to 2019. This year's number (9,149) remains about 50 per cent higher than pre-COVID levels.

Erin Turner says the travel industry needs fair rules for consumers and stronger regulation.(ABC News: John Gunn)

A 2021 survey by consumer advocacy group CHOICE found 43 per cent of travellers have received some form of travel credit or voucher when they had their trips cancelled or delayed.

"We've seen issues with short expiry dates, with people being unable to transfer credit to a family member or a friend, or facing booking fees or restrictions on how they can use it," Erin Turner, director of campaigns from CHOICE, told the ABC.

"There's potentially a lot of unfair terms and conditions out there and people may struggle using these vouchers over the summer period."

Ms Turner said Australian airlines' customer service went backwards during the pandemic, and people faced unfair hurdles when using their flight credits.

"The airlines aren't taking customer service seriously. In fact, as part of the pandemic response, the airlines removed ways for you to contact them," she said.

"I am worried that airlines are banking on you not using a travel voucher or credit.

"It's your money, but it's sitting with them and their bottom line improves if you don't use it."

26 calls and 60 hours to navigate 'absurd' credit scheme

Newcastle resident Geoff Nattrass has made 26 phone calls to Qantas in the past few months trying to use travel vouchers to book a trip to Hamilton Island with his partner.

Geoff Nattrass says he is disappointed at the national carrier.(ABC News: Ross McLoughlin)

Over the past two years, Mr Nattrass had several interstate trips disrupted due to travel restrictions and he ended up with more vouchers each time.

Mr Nattrass said he managed to use the bulk of the initial $1,800 credit received after his and his partner's trip from Newcastle to Adelaide was cancelled last year, but he described the flight credit scheme as "complex" and "absurd".

"With Qantas, if you've got multiple flight credits, you can't book online, you have to contact the call centre and try and book the flights over there," the 71-year-old retiree told the ABC.

"I've got a stream of emails. You've got to keep almost a spreadsheet to keep track of what's going on.

"It's way too complex and you'd have to be pretty determined to do it.

"I'm retired, I've got the time to spend 60 hours of my life on the phone to book one flight, but I can't imagine what it's like for someone who's working full-time or has kids."

Qantas said about 80 per cent of its customers redeem their flight credits online but, in some circumstances such as complicated travel arrangements or a flight credit that is partially used, the online method may not be applicable.

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Mr Nattrass has made complaints to Qantas and the Airline Consumer Advocate regarding his case.

He said that although he and his partner were likely to travel again before their vouchers expire, he was tired of trying to use his credits.

"Unless Qantas radically changes the system, I can't see me bothered to spend 60 hours, so we're probably going to kiss $400-500 goodbye because it's just not worth the time and effort," he said.

"I think they need to look at the complaints, they need to look at their system."

Total value of travel credits still unknown

The ABC also has spoken to a dozen consumers with flight credits who variously described their airlines' flight credit schemes as "inefficient", "inflexible" and "hard to claim".

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A spokesperson from Qantas said that the majority of its customers who have flight credits have until the end of 2023, or more than two years, to take their flights.

"Hundreds of thousands of flight credits have already been redeemed by our customers, so any suggestion that airlines don't want customers to use their flight credits has no basis," the spokesperson told the ABC.

"We understand the disruptions caused by COVID travel restrictions have been extremely challenging for customers, which is why we have allowed fee-free moves for all flights, extended the validity of all COVID-related credits and made it easier to redeem them online."

Last week, Virgin Australia resumed its international services but so far, only to Fiji.

"We're committed to helping our customers whose flights or plans have been impacted by COVID-19," a spokesperson told the ABC.

"Our Flexible Flying Policy allows customers to change or cancel their booking without paying a change fee for domestic travel up to 30 April 2022 and for international travel up to 31 December 2022."

Virgin customers who have been given credits for cancelled flights booked before April 20, 2020, have until the end of July next year to book their flights, and those who have been given credits since then have 12 months to use them.

Jetstar said all credit vouchers for flights impacted due to COVID have been extended until December 2022 and they can be used to book multiple flights and for multiple people, while Rex is the only Australian airline that offers a COVID refund guarantee.

But none of the airlines have provided the total value of flight credits they are currently holding. Some industry insiders have estimated it could be worth billions of dollars.

'Confusing' and 'changing' consumer rights

In general, the Australian Consumer Law has our back. But as a result of COVID-related cancellations, it will ultimately come down to the terms and conditions agreed to when a traveller booked their tickets.

Consumer law expert Professor Jeannie Paterson from the University of Melbourne told the ABC that the pandemic has made it harder for people to understand their legal rights.

Jeannie Paterson says Europe and the US have stronger laws that are specifically directed at flights.(ABC News: Crystalyn Brown)

"Unfortunately, it's quite confusing. The rights have changed over the course of pandemics," she said.

"Initially, consumers whose flights were cancelled due to COVID-19 were probably pretty clearly entitled to a refund … I think the situation has changed because it seems to me that airlines have changed their terms and conditions.

"So now, they're asking consumers to take out insurance against COVID cancellations."

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Professor Paterson said although airlines were facing unprecedented challenges, the anguish from consumers has exposed the flaws in the travel industry and the consumer law.

"We need a strong regulatory reaction," she said.

"It's really important that we get clear guidelines on what consumers' rights are, some practical tips on how to not lose money through the loss of their flight vouchers, and also some guidance to industry and what the government's expectation is to a fair approach to flight credit.

"We don't want airlines to collapse … it should not be an insurmountable hurdle to use a credit or a travel voucher."

How do I make a complaint?

  • 1.Contact the airline, either through email, the online complaint form or by speaking to a senior person at the call centre
  • 2.Approach your local consumer affairs agency or Fair Trading agencies
  • 3.If those methods don't work, you can also complain to the ACCC
  • Professor Paterson said if there is not better regulatory enforcement, then legislation will need to be passed to protect people's entitlements.

    "It's really important that we act now because 2022 I think is going to be surprisingly disrupted and we want people to get a resolution before they're about to expire."

    Calls for strong regulation and law reform

    Ms Turner agrees and is calling on the federal government to establish an independent ombudsman for the travel industry.

    "We've yet to see the ACCC or the federal government look at the underlying structural issues with the consumer law," she said.

    "It's likely that we'll continue to see instances where either you need to cancel travel for health reasons or you're unable to travel. This is our reality now, we need our laws to catch up."

    The ACCC told the ABC that "[the] Commonwealth, and consumer regulators, continue to consider whether any policy reforms or industry actions may help address the issues that have arisen in the pandemic, taking into account a wide range of views from relevant stakeholders".

    "Any reform is ultimately a question for government," an ACCC spokesperson said.

    The federal government and states and territories will conduct a review of the effectiveness of the Australian Consumer Law in the coming months, in response to the consumer issues caused by the pandemic.

    “The ACCC, along with state and territory consumer affairs regulators, has issued guidance for consumers and businesses on a range of areas impacted by the COVID-19 pandemic, including bookings for travel and events," Assistant Treasurer Michael Sukkar told the ABC.

    "If a consumer is having difficulty understanding their rights or dealing with a business, they should speak with their state or territory consumer affairs regulator or the ACCC."

    What if I lost flight credit details?

    • Booking numbers or credit card statements are solid proof
    • A flight credit or voucher is effectively a debt owned by the airline
    • Travellers have rights to contact airlines to retrieve their details

    So far, the New South Wales government has committed to introducing an information standard for travel bookings that is aimed to make it easier to understand what people's rights are when they book a flight.

    In July 2020, the ACCC issued a practice guidance to the travel industry and advised travel providers to prepare to extend the expiry period of any credits and to allow consumers a reasonable period to use their credits after travel restrictions were lifted.

    For the Harbaughs, they are still hopeful that they can reunite with their family in the US next year.

    "We haven't been confident to actually book any additional flights at this stage," Ms Harbaugh said.

    "A lot of travel arrangements will now be last-minute, because we're just too worried about whether or not we're going to lose further money on these sorts of transactions.

    "We're still hopeful that we'll be able to achieve that in 2022, we're just not sure when."


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