Webjet Group shares dive on ACCC allegations
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More new: Webjet Group shares tanked in early trading after the Australian Competition and Consumer Commission (ACCC) announced it had commenced proceedings in the Federal Court against the travel company's wholly owned subsidiary, Webjet Marketing, for misleading and deceptive conduct.
Webjet shares were down 6.5% to 79 cents by 10:50am AEDT.
In response to the ACCC's allegations that Webjet made misleading claims about airfare prices and flight bookings, the company said it is "confident there is no widespread customer dissatisfaction with our offering, disclosure, service or pricing".
Webjet also noted that its subsidiary has fully cooperated with the ACCC prior to the issuance of the proceedings and has already "voluntarily and proactively" undertaken a number of steps to further improve its disclosure of pricing and fees.
The company said that it is "not yet possible to determine the financial implications of any outcome from the proceedings" given the consumer regulator is seeking a range of remedies, including pecuniary penalties.
What they said: "Webjet Marketing takes compliance with Australian consumer law extremely seriously and has always prided itself on its high levels of trust with all stakeholders, especially our customers," the company said in a statement.
"Millions of customers have chosen to book through Webjet Marketing during the period in question and we have very rarely been contacted by customers complaining about our disclosure of fees," it said.
ACCC takes Webjet to court over misleading claims
The news: The Australian Competition and Consumer Commission (ACCC) has commenced proceedings in the Federal Court against online travel booking site Webjet Marketing, a subsidiary of ASX-listed Webjet Group, for allegedly making false and misleading representations to consumers about flight prices and bookings.
The context: The ACCC alleged that Webjet breached the Australian consumer law when it made statements on its app, in marketing emails, on social media and on its website about the minimum price of airfares which omitted compulsory fees charged by Webjet.
The statements included 'flights from $x' when the price quoted excluded Webjet’s compulsory ‘Webjet servicing fee’ and 'booking price guarantee' fee which ranged from $34.90 to $54.90 per booking, depending on whether the flights were domestic, New Zealand or Pacific flights, or other international flights.
These statements were made for various periods of up to five years between November 2018 to November 2023, the regulator said.
Webjet is also alleged to have breached consumer law by displaying a confirmation page online and sending a confirmation email after taking payment for a completed flight booking, even though it had not actually booked the flight with the airline.
In these cases, Webjet later allegedly sought additional payment from the consumers to complete the booking, or offered the consumer a refund for the flight, despite having earlier confirmed the booking.
The ACCC claimed that Webjet made these misleading representations in respect of 382 bookings over more than five years, between at least 1 November 2018 and 25 June 2024.
The consumer regulator is seeking pecuniary penalties, declarations, injunctions, consumer redress, costs and other orders.
What they said: "During this time of cost pressures, many consumers are carefully considering travel arrangements and seeking to save money," ACCC chair Gina Cass-Gottlieb said.
"A statement about the lowest price must be a true minimum price, not a price subject to further fees and charges before a booking can be made," she said.
The sources: ACCC media release, ASX announcement
