The global travel booking service Flight Centre added travel insurance and other extras to a quote without informing the customer
The customer paid without knowing he’d been upsold and was informed by Flight Centre that he should have checked the details of the quote
The ACCC says such tactics are legal as long as the cost of the extras is included in the topline price
When Maaz Sayed recently booked a flight through Flight Centre for a family trip to Mumbai, the transaction took a turn he wasn’t expecting.
Without his consent, the business tacked on both $932 worth of travel insurance to the quote they emailed him, and something called the “Captain’s Pack”, which cost $236 and included extras such as lost baggage tracking and a tree planted through a Brisbane-based organisation called ReForest to offset the carbon miles.
Maaz paid the quote without knowing these extras had been added.
“At no point during my phone consultation was insurance discussed or offered as an optional product,” Maaz says.
Flight Centre told Maaz that it was up to him to notice the additions and let Flight Centre know if he didn’t want them
After he complained, Flight Centre told Maaz that it was up to him to notice the additions and let Flight Centre know if he didn’t want them.
Citing chapter and verse of the Australian Consumer Law (ACL), Maaz informed Flight Centre in no uncertain terms that he was not happy about this approach to doing business.
It’s a sales trick we’ve seen all too often in our continuing campaign against unfair business practices, or unfair trading. Automatically adding unwanted extras would be classified as a ‘dark pattern’ when it happens online, or a design element on a digital page that pushes you into making choices you didn’t intend to make.
The federal government has vowed to legislate a ban on unfair trading tactics, starting with subscription traps and drip pricing. Whether adding extras without consent will be outlawed remains to be seen.
Non-transparent disclosure
The explanation to Maaz from the Flight Centre complaints team suggests that adding expensive options without explicitly informing the customer was nothing new for the business.
“The quote sent through included a price for insurance. At this stage, it was simply a quote and as the consumer you are under no obligation to proceed with the purchase of the product if it did not meet your requirements,” a customer service agent told him in an email exchange.
The agent made the point that the insurance price was itemised and listed separately throughout the quote, saying “if you did not wish to proceed with this product you did not have to proceed with payment”.
They added that he should have called and spoken to FlightCentre about this before completing payment.
The original Flight Centre agent Maaz booked the flight through also stressed these points, saying “I include both travel insurance and the Captain’s Pack in all initial quotes to provide a complete travel package for review. These items are entirely optional, and you were under no obligation to proceed with them.”
Pre-loading optional products and then suggesting the consumer should later detect them contradicts the requirement for transparent disclosure of optional extras and constitutes an unfair sales practice
Flight Centre customer Maaz Sayed
The self-exoneration didn’t sit well with Maaz.
“Your message repeatedly implies that as a consumer I should detect undisclosed add-ons myself and contact your agent before payment,” he told the Flight Centre rep.
“That is the opposite of informed consent and inconsistent with your duties when offering financial products and add-ons.”
“Pre-loading optional products and then suggesting the consumer should later detect them contradicts the requirement for transparent disclosure of optional extras and constitutes an unfair sales practice,” he added.
We asked Flight Centre whether it automatically added options to bookings and left it up to customers to notice this and ask that they be removed but didn’t receive a response.
An Australian Competition and Consumer Commission (ACCC) spokesperson tells us that adding in extra options for customers is not a violation of the ACL as long as the extra cost is included in the topline price shown by the business.
“If a business accurately represents upfront the total single price of a good or service, inclusive of pre-selected extra fees, they will not be in breach of the ACL unless they have otherwise misled or deceived consumers,” the spokesperson says, adding that whether a business has misled or deceived consumers “will depend on the individual circumstances in each case”.
It’s not the first time Flight Centre has been called out for questionable tactics. In 2018, the company copped a $12.5 million fine in a case brought by the ACCC for trying to induce Singapore Airlines, Emirates, and Malaysia Airlines to enter into price fixing arrangements.
It’s not the first time Flight Centre has been called out for questionable tactics
In 2019, CHOICE published the results of our COVID travel cancellation survey, revealing Flight Centre to be one of the worst offenders when it came to processing refunds.
Following Maaz Sayed’s complaint, the insurance policy was cancelled and he was refunded for the extras he never asked for.
But he feels he has a duty to let other Flight Centre customers know to check their quotes before paying.
As Maaz explained to Flight Centre, “adding the highest-priced product without discussion is inconsistent with obligations to ensure consumers are not misled or sold unsuitable products”.
Andy Kollmorgen is the Investigations Editor at CHOICE. He reports on a wide range of issues in the consumer marketplace, with a focus on financial harm to vulnerable people at the hands of corporations and businesses. Prior to CHOICE, Andy worked at the Australian Securities and Investments Commission (ASIC) and at the Australian Financial Review along with a number of other news organisations. Andy is a former member of the NSW Fair Trading Advisory Council. He has a Bachelor of Arts in English from New York University. LinkedIn
Andy Kollmorgen is the Investigations Editor at CHOICE. He reports on a wide range of issues in the consumer marketplace, with a focus on financial harm to vulnerable people at the hands of corporations and businesses. Prior to CHOICE, Andy worked at the Australian Securities and Investments Commission (ASIC) and at the Australian Financial Review along with a number of other news organisations. Andy is a former member of the NSW Fair Trading Advisory Council. He has a Bachelor of Arts in English from New York University. LinkedIn
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