Need to check unfair terms of tour and travel industry

This week I want to refer briefly to a recent order of the apex consumer court, to highlight the unjust terms and conditions imposed on consumers by the tour and

This week I want to refer briefly to a recent order of the apex consumer court, to highlight the unjust terms and conditions imposed on consumers by the tour and travel industry and the urgent need for the consumer protection regulator constituted under the Consumer Protection Act of 2019, to step in and put stop to all such unfair and inequitable terms.

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The apex consumer court’s order centres around a claim for refund made by a consumer following cancellation of his trip on account of the Swiss Embassy’s refusal to grant him a tourist visa. Here, the consumer’s contention was that the travel agency collected Rs 60,000 from him on May 23, 2013 as the booking amount and subsequently, on August 21, the remaining amount of Rs 1,92,970, despite knowing that on august 19 his visa application had been rejected and that he would therefore not be able to travel. Worse, later when he sought a refund, he was told that as per their terms and conditions, he was not entitled to any refund.

The travel agency in turn claimed that they had got to know of the rejection of the visa application only on August 26 and as per their cancellation policy, the consumer was not entitled to any refund for cancellation seven days prior to the date of departure.

The apex consumer court said the agency cannot usurp the money paid by the consumer, particularly when he had not availed of their services in respect of the tour. However, while the lower consumer courts had ordered refund of the entire amount paid by the consumer, the apex consumer court allowed the tour agency to retain Rs 30,000 on account of the fee spent on the visa application and other administrative expenses and ordered refund of the remaining amount with 7% interest.(Makemytrip (India) Pvt Ltd Vs Vijendra Mathur, RP NO 1877 of 2018, date of order: August 27, 2020)

Consumers have for long suffered injustice, financial loss and mental agony on account of unreasonable terms in consumer contracts and have had to wage protracted legal battles for justice. Consumers were particularly at a disadvantage on account of the absence of a law to curb such unfair terms.

Now the new consumer protection law fills the gap in this area. The Consumer Protection Act, 2019, defines unfair consumer contracts as those that cause significant change in the rights of consumers . One of the examples provided, says: “Imposing on the consumer, any unreasonable charge, obligation or condition which puts such consumer to disadvantage” is an unfair contract.

So the consumer watchdog -- the Central Consumer Protection Authority(CCPA) -- has to now regulate consumer contracts in the hospitality, travel and tourism sectors and ensure fair play. I particularly refer to the tour and travel industry because of the large number of consumer complaints emanating from unreasonable contract terms and the fact that unlike sectors such as insurance, telecom or housing, there is no sector regulator here.

Interestingly, the Competition and Markets Authority in the United Kingdom launched a concerted campaign last year against unfair and opaque contract terms vis-à-vis the holiday and travel industry.

The two examples of such unfair terms that the Authority quoted is highly relevant in the Indian context too because here also, consumers suffer huge financial loss when circumstances beyond their control such as sickness or death in the family force them to cancel a trip

Terms that allow a business to take large, upfront deposit , but refuse refund on cancellation of the trip, irrespective of the amount the business is losing or the reason for the cancellation, is unfair, said the Authority. Similarly, when a business insists on a large cancellation fee which bears no relation to the actual losses it experiences from the cancellation, such a condition is unfair, it said..

The consumer protection regulator in India too needs to take up such campaigns to end unfair contracts.

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