Up to 63,000 Australians who used Airbnb between January 2018 and August 2021 may be eligible for compensation after the platform admitted it misled people by quoting prices for Australian accomodation in US dollars.
The Federal Court has also hit Airbnb Ireland – the parent company that runs the Australian operations, including the website and app, with $15 million in penalties. The company will offer up to $15 million in compensation to eligible consumers.
Airbnb received more than 2,000 complaints from Australian customers about being charged in US dollars between January 2018 and August 2021. The Court found that Airbnb had told the complainants that they’d selected USD prices, when in fact that hadn’t happened.
The company acknowledged that during that period, prices on its website did not indicate whether it was in Australian or US dollars. It wasn’t changed until 31 August, 2021, so prices in US dollars were marked as ‘USD’. The issue involved around 70,000 users, with around 63,000 paying more than necessary.
ACCC chair Gina Cass-Gottlieb said the Airbnb platform was meant to shown prices in Australian dollars to anyone local who had not manually selected otherwise.
“Consumers were misled about the price of accommodation, reasonably assuming the price referred to Australian dollars given they were on Airbnb’s Australian website, searching for accommodation in Australia and seeing a dollar sign,” she said.
“By paying in US dollars, these consumers were charged more than they expected to pay, and were deprived of a chance to make an informed decision about whether to make the booking because of this misleading conduct regarding the price.”
The ACCC took legal action in mid-2022 over the issue.
“We took this case to send a strong signal to large digital platforms like Airbnb that they must comply with the Australian Consumer Law and not mislead consumers,” Cass-Gottlieb said.
“We are pleased with the undertaking by Airbnb to pay compensation, which provides a meaningful outcome for the affected consumers.”
The compensation Airbnb will offer to affected consumers will be the difference between the price the consumer expected to pay in AUD and the price they actually paid due to the USD/AUD exchange rate, as well as any additional foreign currency transaction fees affected users may have incurred.
The average payment is expected to be about $230 per consumer. The figure vary depending on the cost of the booking, exchange rate on the date and any charges paid to a financial institution.
“Affected consumers ultimately paid significantly more than they expected to pay because of the prevailing USD/AUD exchange rate at the time. Some users also paid additional charges to their banks as a result of paying in a foreign currency,” Cass-Gottlieb said.
Affected consumers will be contacted by Airbnb and by Deloitte Australia, which is administering the compensation claims program on behalf of Airbnb.
Consumers will receive an initial communication from Airbnb via email and text message, inviting them to log-on to their Airbnb account, where further information will be available about how they can lodge a claim. Airbnb will contact affected consumers with information about the consumer redress scheme by Monday, 5 February, 2024.
Airbnb has also been ordered to pay part of the ACCC’s costs and establish and maintain an Australian Consumer Law compliance program.