Be on guard against unfair business practices this Christmas
The tinsel is twinkling at full glint on Kiwi high-streets, but don’t get mesmerised. It’s time to put your wallet on guard this Christmas.
Dodgy pricing, non-disclosures, inflated holidays, scurrilous charging tricks, false advertising, bold-faced scams and straight-out fraud are also in full swing.
Inflation might be biting at our knees, but that’s no excuse for businesses to push aside fair-trading practices or responsibilities.
Here are four financial spoilers to watch out for this summer.
Unfair pricing practices
If you’re looking at a package holiday, watch out for red flags. I recently attempted to book an Otago Rail Trail cycling trip with a family group of four.
The company advertised a price per person “from $685” for two nights. This “from” price was available every day in January on a day-by-day calendar. The booking system took a non-refundable deposit of $300 per person once dates were selected.
The real price was emailed days later, with a 40% increase. That left us in the uncomfortable position of asking for the non-refundable deposit back. The business gave our group $1050 and kept $150 as an admin fee for itself. The company admitted it knew its website was out of date due to inflation and didn’t have time to change it.
When I backed up the bicycle, I realised my wallet had been punctured.
Did that really happen? We’ve been charged $150 to find out their prices were a country mile from those advertised. There was no indication on the website of an admin fee.
The business also charged for two bikes we didn’t need, despite advertising “yes you can bring your own bikes, pedals, seats, etc. Just talk to our team to let us know”. Its policy is to charge everyone for bike hire, while openly encouraging people to ride their own. It also admits knowing this isn’t disclosed on their website.
The whole experience felt like bait-pricing (luring us in with a deal that isn’t available). This company is still taking non-refundable deposits from customers, before providing firm pricing. It still hasn’t adjusted its website prices. It still hasn’t disclosed their forced-to-hire policy and it still doesn’t warn there’s an admin charge. Rest assured, I’ve not been timid in telling the company how I feel about this, but it won’t budge.
What does a consumer do? Under New Zealand law, we can put in a complaint to the Commerce Commission of unfair pricing practices. I’ve now lodged one against Trail Journeys (part of the World Expeditions Travel Group).
The group runs 16 travel companies with different brands and it would be wise to investigate if this behaviour is endemic. The commission receives thousands of complaints a year and there’s no guarantee mine will be investigated. There may be bigger wheels to whip.
The regulator can’t remedy the situation for our group of cyclists, so that leaves us paying $45 to the disputes tribunal to claim back the $150 admin fee. And it leaves Trail Journeys to keep dangling out-of-date prices at customers. The holiday has now been booked with Big Sky Adventures who fell over themselves to provide transparent pricing.
Airbnb pros and pitfalls
Watch out for Airbnb this holiday season. It is falling out of favour with high service charges and owners with lists of rules and fines. Here’s one pro and pitfall to be mindful of.
The good: A friend booked an apartment with a king-size bed and a balcony last week. They arrived to find a double bed and no balcony. Within hours, Airbnb had given a partial refund under their get-what-you-booked guarantee known as “AirCover”.
The bad: Recently during one of my own stays, a salt shaker fell from a cupboard. It hit a glass cook top and caused an explosion of cracks. It was mortifying and cost $700 to fix.
I instantly wished we’d booked a motel. Airbnb appears to promote a policy of chase the customer first, not the insurer. Owners shouldn’t be allowed to charge guests if the damage was insurable and not wilfully negligent. Airbnb’s own Host AirCover (which isn’t a real insurance policy, but alludes to being one) is difficult for hosts to achieve a pay-out. Proper holiday-let insurance should be compulsory for all hosts.
Trademe scams
My dad called last week with good news – his road bike had sold for $2000. An hour later, Trademe notified him the buyer was fake. They would attempt to get dad to pay for shipping and pocket his money. No one loses their bike, just the postage costs.
Four times in a week, Dad sold the bike. If one man can suffer four fake sales, Trademe has a big problem. Bigger than they’re letting on. We’ve lost faith in their ability to keep hackers out.
When you spend Boxing Day trying to sell those unwanted presents, don’t assume all buyers are genuine. Don’t agree to cover shipping costs and make sure you use Trade Me’s Ping account to complete the transaction.
Credit card misuse
A timely reminder to be vigilant and check your accounts regularly over Christmas. A friend lost $16,000 this week when their Revolut card was used for a shopping spree in Selfridges department store in the UK.
These cards are yet to launch in New Zealand, but are supported by the zero liability policies offered by Visa and Mastercard. It’s stressful proving you’re not responsible for fraud, and remember you’re the number one suspect. It’s estimated more than 50% of chargebacks are friendly fraud (a deliberate attempt by the cardholder not to pay).
Stay alert and let’s hope our wallets don’t limp into January, worse for wear.
NOTE: Trail Journeys said its packaged rates were designed to give customers a convenient, all-inclusive offering. As they are all-inclusive packages, and are not dynamically priced, they cannot be “cherry-picked”. As such bikes, transport etc. form part of the package and are charged as such. The company was not able to respond further due to staff sickness.
Opinions are a personal view and general in nature. They are not a recommendation for any individual to buy or sell a financial product. Readers should always seek specific independent financial advice appropriate to their own circumstances.