|OTAs were found to provide information about price and refund policy in an unclear manner|
OTAs were found to provide information about price and refund policy in an unclear manner
- Measures to indicate important information in a standardized manner should be prepared -
As independent travel is becoming more popular than package tours, the number of consumers making a direct booking for travel-related products, including flights and hotels, through online travel agent (or OTA* for short) websites is growing. However, important information regarding products sold on those OTA websites is not sufficiently provided to consumers, and as a result, consumer complaints are rising.
* OTA(Online Travel Agency) : a business operator making online bookings of flights, hotels, etc. on behalf of others
Accordingly, the Korea Consumer Agency (President Lee Hee-sook) analyzed the consumer complaints related to 11 domestic and international business operators (OTA)* against which more than 100 consumer complaints were received by the KCA for the past 3 years (2016-2018), and conducted an investigation on how the OTAs provided their product information, including transactions conditions.
* 7 Global OTAs (Agoda, Booking.com, Trip.com, Hotels.com, Expedia, Gotogate, Kiwi.com) & 4 Domestic OTAs(Hana Tour, Interpark, Mode Tour, Yellow Balloon Tour)
□ The number of consumer complaints involving OTA accommodation and flight services has more than quadrupled in the last 3 years.
The number of the 11 OTA-related consumer complaints received by the 1372 Consumer Counseling Center* and the Cross-Border Transaction Consumer Portal** for the past 3 years was 8,033 in total. By year, 884 cases were received in 2016, followed by 2,461 cases in 2017 and 4,688 cases in 2018.
* 1372 Consumer Counseling Center run by the Korea Fair Trade Commission is the only government-run call center that involves consumer groups, the Korea Consumer Agency and local governments.
** Cross-Border Transaction Consumer Portal run by the Korea Consumer Agency is a cross-border transaction information network to provide damage prevention information and resolve cross-border transaction-related consumer complaints
By type, ‘delay in cancellation and refusal to refund’ accounted for the largest share of the consumer complaints at 5,036 cases (62.7%). In particular, in many cases, refunds were delayed without any reasonable reasons even though consumers made a cancellation request within a cooling-off period, or business operators refused to provide refunds for the products which consumers bought without recognizing the fact that there would not be a refund, because signs that state ‘no refunds’ were not clearly indicated.
In addition, ‘charging unfair penalties and fees (e.g. charging more than the amount acfinal payment amount or charging unnotified additional fees), and dissatisfaction in prices’ accounted for 1,042 cases (13.0%), followed by ‘non-fulfillment of contract (e.g. a sudden hotel booking cancellation on the part of a business operator, and a flight cancellation due to airline circumstances),‘ with 870 cases (10.8%).
□ Information related to non-refundable products and changes in the amounts charged is not sufficiently provided.
The result of the investigation on the provision of product information of 11 domestic and overseas OTAs showed that consumers were not sufficiently provided with important information, including selling price and refund policies.
※ Among the 11 OTAs, 7 OTAs sell products related to both accommodations and flights, 2 OTAs sell only accommodation-related products, and 2 OTAs sell only flight-related products.
A ‘No Refund’ policy is the important contents of a contract, and therefore it needs to be clearly indicated so that it can be easily recognized by consumers. As for accommodation-related products, the investigation result found that only 4 (44.4%) out of 9 OTAs indicated their ‘No Refund’ policies for accommodations differently from others in colors, sizes, and thickness, and the other 5 OTAs (55.6%) indicated the policies in the same way that other information was displayed, making it difficult for consumers to clearly recognize them.
As for flight-related products, only 2 (50.0%) out of 4 OTAs selling ‘non-refundable’ products indicated their ‘No Refund’ policies in such a way that consumers can easily recognize them, and the other 2 (50.0%) OTAs indicated the policies in a way that is not distinguishable from other information.
In addition, as for accommodation products, 6 (66.7%) out of 9 OTAs prepared a separate procedure of consent so that consumers can clearly recognize their‘non-refundable’ products, and for flight products, 2 (50.0%) out of 4 OTAs prepared such consent procedure.
Furthermore, in the case of accommodation products, only 3 (33.3%) out of 9 OTAs provided information about the fact that there may be differences between invoice amount and amount actually paid, depending on credit card fees and foreign exchange rates at the time of booking overseas accommodations and flights, and in the case of flight-related products, only 4 (44.4%) out of 9 OTAs offered such information to consumers.
□ Important information, including price and refund policy, need to be indicated in a standardized manner.
Due to the nature of OTAs, consumers can sustain damages when they are not provided with clear product information, and therefore, guidelines for the provision of product information needs to be prepared.
Based on the investigation results, the KCA will prepare standards (tentative) for the provision of important information regarding OTA products and transactions conditions, and continue to consult with the public-private consultative body for OTAs* run by the Ministry of Culture, Sports and Tourism so that the standards can be included in the guidelines.
* A cooperative self-regulatory consultative body of the Ministry of Culture, Sports and Tourism, the Korea Fair Trade Commission, the Korea Consumer Agency, domestic and international OTAs and relevant associations in order to protect OTA users and make changes to unfair transaction practices (launched in September, 2019)
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