During negotiations with the Consumer Ombudsman, SRG Finland, which maintains several booking portals, decided to waive the handling fee when an airline has cancelled a flight and returns the money paid for it to the customers. The travel agent also committed to the Consumer Ombudsman’s demands not to charge a handling fee in certain situations in the future.
Oy SRG Finland Ab maintains several booking portals, such as supersaver.fi, travelstart.fi, fi.mytrip.com and seat24.fi. Through the booking portals, Finnish consumers can purchase, for instance, flight tickets and compare flights offered by different airlines. SRG Finland is part of the Swedish Etraveli Group.
Once the ticket has been purchased through the travel agent, i.e., the booking portal acting as an intermediary, the travel agent’s responsibility is usually limited to selling the ticket and appropriately mediating it to the consumer. Although the travel agent itself is not responsible for the flight, it is always responsible for ensuring that the services it provides are performed diligently and in accordance with the agreement and in compliance with the information obligations.
The Consumer Ombudsman has examined the role of the travel agent and its practice to charge consumers a handling fee for refunding the price of the flight ticket if the airline has cancelled the flight. If the travel agent acts on behalf of the airline, the Consumer Ombudsman has considered that charging a handling fee is not permitted. However, if the travel agent offers a genuine optional additional service and operates on the consumer’s explicit commission, a fee may be charged for the service. The Consumer Ombudsman clarified to the travel agent the rules for charging a handling fee, especially from the perspective of national consumer protection legislation, and also required measures.
Additional services must be genuinely optional and give better rights
The Consumer Ombudsman drew the attention of the travel agent to the fact that, under EU rules, passengers are entitled to a full refund from the operating air carrier responsible for the flight if the carrier has cancelled the flight. Travel agents can offer consumers assistance in seeking a refund of the full cost of the ticket from the airline under certain conditions as their own additional service subject to a fee. For a service to genuinely constitute an optional additional service, the service must give the passenger added value and better rights than those given by the minimum legal requirements.
“The exercise of passengers’ statutory rights cannot be bound to additional services subject to a fee by forcing them to buy such services or by giving a misleading impression that a passenger should purchase the service from a travel agent in order to exercise their rights”, states Consumer Ombudsman Katri Väänänen.
When selling optional additional services, the travel agent must also always provide appropriate information on the content, terms and price of the service in particular. The information on the added value of the service provided when a traveller is deciding whether to purchase assistance subject to a fee from the travel agent or rather to turn to the airline themselves for a refund free of charge can be considered essential information for the traveller. Furthermore, additional fees may not be charged without the explicit consent of the consumer.
Charging a handling fee is unreasonable in certain situations
Contract terms or practices cannot be used to force the consumer to exercise their rights against a fee by, for example, reserving the right to automatically deduct the handling fee from the price of the flight ticket returned to the consumer or by seeking a refund from an airline without the consumer’s commission after the airline cancels the flight. Another essential point is the consumer’s freedom to choose whether they want to claim their money back directly from the airline or to use the travel agent’s assistance at an additional cost.
The charging of a handling fee always requires the consumer’s explicit request to seek a refund on their behalf, the explicit consent to the fee and the realisation of their freedom of choice. It is a question of unfair terms in contracts or contract practices if the consumer cannot exercise their right to reimbursement at no cost directly from the airline. This may be the case when the travel agent actually acts in a refund process on behalf of the airline using joint systems agreed with the carrier to effectuate the refund and the consumer has no de facto way of exercising their rights outside these arrangements. The Consumer Ombudsman has considered that this is not an additional service provided by the travel agent, but rather that the airline uses the travel agent for its own account to make refunds. In such case, the travel agent must request the air carrier for compensation for the costs incurred for the processing of the refunds, as these costs cannot be passed on the consumer.
Measures required of the travel agency
During the negotiations between the Consumer Ombudsman and the travel agent, SRG Finland announced that it had decided to waive the handling fee in refund situations where the airline had cancelled the flight. Although the travel agent stopped charging the fee, it also gave the Consumer Ombudsman a commitment. The travel agent has committed itself to that, in the future, when providing the option to seek refund on the consumer’s behalf as an additional service, it shall ensure that:
- it shall only seek a refund from the air carrier if the consumer has exercised their freedom of choice and decided to seek the refund through the travel agent by submitting an explicit request to travel agent for seeking a refund for the cancelled flight on their behalf;
- no handling fee shall be charged unless the consumer has been clearly informed about the additional fee prior to concluding the contract on the additional service and the consumer has given their explicit consent for the handling fee; and
- no handling fee shall be charged when the consumer has no de facto way of exercising their freedom of choice if the air carrier makes the refund of the flight ticket to the travel agent regardless of the consumer’s request for a direct refund.
In addition to the above, the Consumer Ombudsman had also demanded that no handling fee be charged when the airline has refused to make the refund directly to the consumer and demanded that the refund be sought through the travel agent. In this respect, the travel agent was not prepared to give the required commitment. Since the travel agent had on its own initiative waived the handling fee more extensively than required, the partial commitment was considered sufficient. However, the travel agent was reminded that it should take into account the rules and principles outlined by the Consumer Ombudsman for charging handling fees if it reintroduces the fee in the future.
The Consumer Ombudsman started to examine SRG Finland’s practices on the basis of consumer reports received by the FCCA’s Consumer Advisory Services. In addition to the handling fee charged, many consumers had reported delayed refunds during the coronavirus pandemic and difficulties in contacting the travel agent’s customer service.
More extensive actions under way at EU level
After the Consumer Ombudsman started investigating the matter, the EU Consumer Protection Cooperation Network (CPC) and the Commission also launched EU-wide dialogues with inter alia, the Etraveli Group, thus also including SRG Finland. The Consumer Ombudsman also participates in the ongoing joint efforts led by the Swedish Konsumentverket, which addresses these problems more extensively.