Flight Centre warned over false adverts, hidden fees

A travel agency with a misleading "Fly for free" promotion has been warned by the Commerce Commission about breaching the Fair Trading Act after offering deals that didn't exist and tickets that weren't available.

Between May and September 2009, Flight Centre's advertising promised customers "We will beat any airline, web or competitor's airfare quote or fly you for free".

However, the commission's investigation found the Australian-owned company wasn't keeping its word, in fact refusing to beat any quote and hiding substantial charges in the small print of its "fly for free" deal.

The commission also found some of the apparently cut-priced deals offered by the Flight Centre, which operated almost 140 outlets in New Zealand and over 1500 shops around the world, were either wrong or didn't include "local payments". One customer, who bought a package tour to Thailand, was charged an extra 20,000 Baht ($854) on arrival - effectively doubling the price.

Details in the small print and online terms and conditions said the company would only beat quotes available to the general public, of the same travel product for the same class and dates.

The rival quote had to be submitted, in writing, to Flight Centre prior to booking, or the company didn't have to compete, Commerce Commission director of fair trading Adrian Sparrow said.

"In the commission's view, the small print terms and conditions fundamentally change the meaning of Flight Centre's headline offer. Businesses need to make sure that headline statements accurately reflect what is being offered," he said.

The commission regarded a public warning the best form of punishment for the apparent breaches at the moment, though it reserved the right to prosecute at a later date, Mr Sparrow said. Only the courts could decide whether a company had legally breached the Fair Trading Act, and could fine infringing companies up to $200,000.

The commission would continue to monitor the company and its deals, Mr Sparrow said.

Flight Centre spokeswoman Marie Pilkington said the company would "take the commission's suggestions on board".

"We acknowledge the Commerce Commission's recommendations, and will continue to adapt the tag line to ensure it is really clear for all consumers. Our main aim is to say `We won't be beaten on price!'," she told NZPA.

The company was pulling its "Fly for free" tag line for the moment, and looking into the other possible breaches the commission had highlighted, she said.

Regarding cheap flights on its website that weren't available, the incident related to technical issues that were fixed as soon as the company was alerted, Ms Pilkington said.

- NZPA