Property booking platform Bachcare has found itself in hot water following an investigation by the Commerce Commission.
The High Court has declared that some of the terms for booking properties on Bachcare were unfair, following proceedings brought by the Commerce Commission.
The case is one of few in New Zealand that has considered unfair contract terms in contracts imposed by digital platforms.
The Commission, which filed proceedings after an investigation, sought declarations that certain terms used by Bachcare were unfair contract terms under the Fair Trading Act 1986. Bachcare has since changed the terms and conditions in question.
Commerce Commission Chair Dr John Small said this included terms that meant if a guest cancelled their booking, regardless of how far away their holiday was, they would lose up to 100 percent of the amount paid.
It also included terms that meant Bachcare would keep its service fee even when the accommodation was cancelled by Bachcare or the owner.
“Our action was prompted by a number of complaints to the Commission and Bachcare from ordinary Kiwis who had booked a place to stay through the online platform,” Dr Small said.
“For example, multiple complaints concerned cancellations due to Cyclone Hale and Cyclone Gabrielle, with guests unable to cancel bookings and obtain a refund when travel to the accommodation was unsafe, not recommended or not possible.
“A number of complaints also related to guests losing deposits when they had made an administrative error, which they then tried to correct.”
Dr Small said Bachcare does not provide the accommodation booked on its platform, but like many trading platforms it does set the terms of trade so this decision should serve as a reminder to platform operators to review the terms used on their sites.
Justice McQueen’s judgment traversed several other examples of the type of detriment to guests.
She found, when viewed together, the complaints gave clear examples of how the terms "created a significant imbalance that was ultimately detrimental to consumers if applied, enforced or relied on”.
Justice McQueen was satisfied the terms would cause detriment, financial or otherwise, to guests.
The declarations were agreed by Bachcare and the Commission prior to Justice McQueen’s judgment.
Dr Small urged businesses to review their standard terms to ensure they are transparent and fair.
“The judgment identified a range of unfair cancellation clauses, reinforcing the need for businesses to assess the fairness of their cancellation terms and the remedies available to consumers when contracts are cancelled, whether by the supplier, the consumer, or circumstances beyond their control.”
Tracey Foxall, Managing Director of Bachcare, said Updated guest terms are already in place, which offer guests fairer and more transparent cancellation options. These new terms apply to all new and future bookings and the benefit of them will also be extended to guests who booked under the most recent previous terms but have yet to travel.
“We respect the Court’s decision to approve the agreement we reached with the Commerce Commission, and are pleased to have reached a conclusion that puts fairness, clarity and consistency at the heart of our guest policies. The updated terms have already been adopted, and we believe they strike the right balance between guest protection and owner confidence,” said Foxall.
Bachcare is a New Zealand business that owns and operates a digital platform that lets guests book holiday accommodation. People who want to book accommodation can access information about accommodation via the website and make a booking through Bachcare’s digital platform.
Bachcare lists properties on behalf of owners. Bachcare itself does not provide accommodation.
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