Youth travel specialist STA Travel has been ordered to pay A$14 million in penalties over the sale of its popular MultiFLEX air pass.
STA claimed that the pass allowed customers to make unlimited changes to flights without incurring any extra fees or charges, but the Australian Competition and Consumer Commission found this was not the case.
“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.
The pass cost $149 in Australia, where it was sold from 2014 until last year. STA Travel sells a similar MultFLEX pass in the UK for £99.
STA Travel encouraged customers to buy the pass, telling them that it would allow them to change flights free of charge with the only cost being any difference in air fare and taxes. However, the ACCC found that for almost a quarter of cases the fees demanded by STA for changing flights were almost double the fees charged by the airline.
In 12% of cases, STA Travel charged MultiFLEX Pass customers to make a change to a flight even though the airline had not charged STA anything to make the change, said the ACCC.
STA Travel admitted liability in Australia. No action has been taken against the sale or advertising of the MultiFLEX pass in the UK.
“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.
STA Travel has been heavily criticised in the UK for refusing to refund customers for flights and holidays cancelled due to the coronavirus pandemic in clear breach of the law.
Many young backpackers reported that they had been left stranded overseas by STA Travel when the Foreign Office advised them to return to the UK, and others reported that they had been charged extortionate fees by STA Travel to book flights home.