Airbnb and Bachcare cancellation terms risk breaching Fair Trading Act

Heavy-handed cancellation policies on accommodation booking sites Airbnb and Bachcare have resulted in some customers being left hundreds of dollars out of pocket.

We’ve lodged a complaint with the Commerce Commission, asking it to take court action against the companies for using cancellation terms we think are unfair.

Complaints about the sites have risen since the last Covid-19 lockdown in August.

Consumers who booked accommodation but couldn’t travel because of the lockdown told us they were denied full refunds. That’s despite not being able to use the accommodation, through no fault of their own.

What we found

We’ve reviewed the booking sites’ cancellation policies and consider they risk breaching the Fair Trading Act, which bans unfair terms in consumer contracts.

The sites’ customers can face steep fees if they need to cancel, in some cases forfeiting 100 percent of what they’ve paid.

Airbnb allows hosts listing on its site to apply cancellation policies that can result in customers losing all their accommodation fee, despite giving reasonable notice they need to cancel.

In contrast, if an Airbnb host wants to cancel a booking, the website states the most they could be charged is $145.

Bachcare’s standard terms are also harsh. Its standard cancellation policy states the customer will lose all accommodation fees and the service fee even if they cancel 60 days before the start of their stay.

In our view, these charges are excessive. Accommodation providers can’t just charge whatever they like. If they impose a cancellation fee, they must have a legitimate basis for the charge and take into account the fact the property could be relet to another customer.

We asked Airbnb and Bachcare whether they’d reviewed their terms for compliance with the act but didn’t get satisfactory answers.

We want the Commerce Commission to seek a court declaration that the cancellation policies are unfair. Any term the courts deem unfair can’t be enforced by the trader.

What you can do

If you’ve been charged an unfair cancellation fee, make a complaint to the Commerce Commission. Let us know too.

If you’ve paid for your accommodation by credit or debit card, you may be able to apply to your bank for a chargeback – a refund to your card.

Your other option is to lodge a claim in the Disputes Tribunal for a refund. Excessive fees can be considered penalties under contract law and are open to legal challenge.

Let us know if you've been unfairly denied a refund