Cancellation clauses – Check your T&Cs!

While we’re all navigating the grey waters of the Consumer Protection Act, inevitably there are going to be instances like the one we encountered last week that leave us scratching our heads…

The case last week saw a consumer taking an ASATA member to the National Consumer Council (NCC) after cancelling a trip on his doctor’s advice. The consumer, who refused at the time of booking to take out cancellation insurance, is now referring to Section 17(5) of the Act that addresses the consumer’s right to cancel if hospitalisation or death occurs; neither of which in this particular case was relevant.

Goldman Judin’s Gareth Cremen sheds some light on the situation for us:

One of the problem areas in the Act is section 17(5) which says that a supplier cannot charge a cancellation fee in respect of a booking, reservation or order if the consumer is unable to honour the said booking, reservation or order due to death or hospitalisation.

The fundamental rule of interpretation of statutes is that where the meaning of any provision is clear and unambiguous, that meaning must be accepted. It is clear that section 17(5) does not cover “ill health” and one cannot simply read this in. If a consumer is unable to honour a booking, reservation or order due to ill health and has a doctor’s note advising the consumer that they cannot travel then they cannot rely on section 17(5) as it does not give the consumer protection.

You will however get consumers who will abuse any process possible and report any of the suppliers (including the travel agency) to the NCC. Travel insurance usually covers cancellation of bookings etc, but the problem is that consumers often refuse to take out travel insurance.

In this scenario, the consumer should not succeed with reporting the suppliers to the NCC. However, there is always a degree of risk involved and I suggest that all suppliers in the travel industry incorporate provisions on their booking forms and terms and conditions which cater for this type of scenario.