We’re calling out Airbnb and Bachcare for their unfair cancellation policies.
We’re calling out Airbnb and Bachcare for their unfair cancellation policies.
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.
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.
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.
Hosts are able to choose a cancellation policy for their listing based on a set of options. (See below)
These are clearly displayed and known when someone books the property. i.e. You have a choice NOT to stay somewhere with a strict no cancellation listing when you make your booking.
For example when I went to the Edinburgh Festival last year I found the majority of places had a strict cancellation policy - i.e. no refund under any circumstances. Needless to say I looked harder and found a place with a more flexible policy - just in case, specially when booking months ahead! Airbnb has since softened this option as noted below - it used to be no refund under any circumstances or advance notice.
From my own experience I know that Airbnb penalises a host for cancelling a guest's booking (even when the host has never done it before and when giving the guest several weeks' notice to find somewhere else), and strips the host of their superhost status.
So Airbnb can be hard on the host too.
Cancellation policy
For stays under 28 nights, you can choose which cancellation options to offer guests.
Flexible - Full refund 1 day prior to arrival
Flexible or Non-refundable - In addition to Flexible, offer a non-refundable option—guests pay 10% less, but you keep your payout no matter when they cancel.
Moderate - Full refund 5 days prior to arrival
Moderate or Non-refundable - In addition to Moderate, offer a non-refundable option—guests pay 10% less, but you keep your payout no matter when they cancel.
Strict - Full refund for cancellations made within 48 hours of booking, if the check-in date is at least 14 days away. 50% refund for cancellations made at least 7 days before check-in. No refunds for cancellations made within 7 days of check-in.
Strict or Non-refundable - In addition to Strict, offer a non-refundable option—guests pay 10% less, but you keep your payout no matter when they cancel.
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