SYDNEY – The Federal Court in Australia has ordered youth travel specialist STA Travel Pty Ltd (STA Travel) to pay A$14 million (US$8.9m) in penalties for making false or misleading claims when advertising its MultiFLEX Pass product.
STA Travel admitted that between March 2014 and August 2019 it made misleading representations in MultiFLEX Pass advertising that consumers who bought the airfare add-on could change their flights without paying fees or charges.
“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.
How STA travel promoted the MultiFLEX Pass. Photo Credit: ACCC.
In many cases, STA Travel’s charges were not reflective of additional fees imposed by the airline. For example, in almost a quarter of cases where a customer was charged extra by STA Travel, the amount was more than double the additional airfare and tax imposed by the airline.
“In 12 per cent of cases, STA Travel charged MultiFLEX Pass customers to make a change to a flight although the airline itself had not charged STA Travel anything at all for the change,” Ms Court said.
“These penalties serve as a timely reminder to all travel businesses that they must not misrepresent the costs applicable when travel services are changed.”
The MultiFLEX Pass cost up to $149 to purchase upfront. Between 2015 and 2019, STA Travel estimates it sold on average approximately 16,000 MultiFLEX Passes per year.
STA Travel admitted liability.
The ACCC said the proceedings are unrelated to any COVID-19 issues.