The Commerce Commission has filed civil proceedings under the Fair Trading Act against Bachcare Limited (Bachcare), alleging that a number of its contract terms are unfair and liable to cause financial detriment to Kiwis and other tourists booking holiday accommodation through the website.
At a time when more Kiwis are jumping online to book holiday accommodation and mid-winter escapes, Commerce Commission Chair, John Small, says they should take the time to read and understand the terms and conditions (Ts & Cs) of their booking – particularly any cancellation or refund policies.
While there is a clear responsibility for businesses, Dr Small says the case against Bachcare serves as a timely reminder to all holidaymakers to “know what you’re signing up to before you make a booking”.
“We also expect that businesses have contracts that do not put consumers at an unfair disadvantage,” he says.
The Commission is seeking declarations from the High Court that some of Bachcare’s previous and current terms for booking properties through the site are unfair, including terms that mean:
- If a guest cancelled their booking, regardless of how far in advance that was from the holiday date, the guest could lose up to 100% of the amount paid.
- Bachcare would keep its service fee regardless of whether the accommodation was cancelled by Bachcare or the guest.
- If the booking was cancelled outside of either party’s control – for example an extreme weather event – and it was not possible to re-schedule the booking, the guest could lose 100% of the amount paid.
If the Commission’s case is successful, the declarations would prevent Bachcare from using these terms in any current or future bookings.
This is the second time the Commission has taken Bachcare to Court. In 2019 Bachcare was fined for misleading consumers by altering and withholding publication of online reviews posted by users of its accommodation services.
As the civil proceedings against Bachcare are now before the High Court, the Commission will not be commenting further.
Background
Bachcare is a full service holiday home rental company in New Zealand. Through its digital platform it currently manages more than 2,000 properties around the country, with more than 150,000 customers per year, and was named one of The World’s Top 20 Vacation Rental Companies in 2019.
Bachcare has changed its terms and conditions a number of times over the last few years and the Commission is seeking declarations in relation to four sets of its terms and conditions (past and current) that we are concerned contain unfair cancellation and unavailability clauses.
Unfair Contract Terms
When deciding whether a term in a standard form consumer and small trade contract is unfair, the court will look at whether the term will significantly advantage or benefit one party over the other, whether the term is reasonably necessary to protect the interests of the party relying on the term, and whether the term causes harm to the party against which the term is applied. The court will also look at the extent to which the term is transparent, and whether there are other provisions in the contract that can balance the term.
There are videos and guidance to help businesses understand unfair contract terms on the Commerce Commission’s website here.
