The Commerce Commission today warned consumers that conditions attached to travel vouchers offering airfares to the Gold Coast of Australia may make holidays no cheaper than flying normally.
Commission Fair Trading Manager Rachel Leamy said that Holiday Resorts International Pty Ltd and retailers distributing the vouchers risk breaching the Fair Trading Act if they do not explain that while the vouchers provide air travel at no cost, the accommodation that must be used is more expensive than usual.
An Australian company with an office in Whakatane, Holiday Resorts International, sells the vouchers to retailers. Holiday Resorts International has been promoting its travel vouchers to businesses only, and not directly to consumers.
Retailers use the vouchers in promotions. For example, consumers who spend more than a certain amount at a retailer's business are given a travel voucher.
However, to use the air travel vouchers, people must stay at accommodation specified by Holiday Resorts International. Charges for the accommodation are higher than usual, in some cases almost double the usual rate.
Some consumers have found that because of the inflated accommodation prices, they have paid more for a holiday even though they received what were described to them as "free" airfares.
The Commission understands that Holiday Resorts International has recently advised retailers that they can continue to market the vouchers but not to describe them as "free". However, Ms Leamy said that the Commission's view is that this is not enough to prevent retailers from breaching the Act if they do not clearly explain the true cost of the holiday.
"Any suggestion that vouchers offer benefit to consumers, when they do not appear to, would be at risk of breaching the Fair Trading Act," she said. "Any consumer or competitor, or the Commission, could take legal action."
The Commission is advising retailers to get legal advice about how they should promote the vouchers, if they choose to use them. At the moment it is not intending to take court action, but will reconsider this decision if necessary.
"To consumers we are saying, 'think about what you want to buy, check the details of any special offers, and shop around - before buying'," Ms Leamy said.
Background
The Fair Trading Act prohibits false or misleading claims about goods and services, and misleading or deceptive conduct in relation to goods or services.
Media contact: Fair Trading Manager Rachel Leamy
Phone work (04) 498 0908
Communications Officer Vincent Cholewa
Phone work (04) 498 0920
Commission media releases can be viewed on its web site www.comcom.govt.nz
