Australia has joined a growing number of countries that have sued Airbnb (NASDAQ:ABNB) for misleading conduct, with the ACCC accusing the short-term rental company of deceiving consumers by charging bookings in US dollars without clear indications of such.
Airbnb has been ordered to pay $15 million in penalties and up to a further $15 million in compensation to thousands of affected customers in refunds and unlawful conversion fees.
70,000 customers impacted
About 63,000 customers of the short-stay company were found to be affected between January 2018 and August 2021, given pricing in US dollars with websites displaying only a “$” sign with no indication of actual currency.
Airbnb admitted early in the court case that it had indeed breached Australian consumer law.
“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,” ACCC chair Gina Cass-Gottlieb 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.
“Eligible consumers will be contacted by Airbnb within the next 45 days and invited to lodge a claim, but they can also contact Airbnb to ask about their claim if they think they are eligible for compensation and have not been contacted by that date.”
Consumer redress scheme
Airbnb will offer compensation to the 63,000 affected consumers, having provided the ACCC with a court-enforceable undertaking.
The company will refund the difference between the price the consumer expected to pay in Australian dollars and what they were misled into paying in US dollars according to the prevailing exchange rate at the time.
They’ll also be refunded any additional foreign currency transaction fees affected users may have incurred.
The ACCC estimates the average payment per customer will be about $230, depending on the cost of their booking, the exchange rate at the time and any charges paid to their bank or financial institution at the time.
Deloitte Australia is administering the compensation claims 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, February 5, 2024.
Consumers are warned to be aware of scammers pretending to make contact on behalf of Airbnb or Deloitte.
The safest way for consumers to gain access to the Deloitte claims portal is via a link in their official Airbnb account. Consumers should only provide their personal information through the claims portal, and not to anyone else.