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So you got a refund but what about the hundreds in fees you paid?

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We recently received an email from a Money reader, Kay.

Kay had put down $11,586 for a trip. Then the borders shut in response to the spread of coronavirus, shrinking the prospect of travel to zero.

She asked the company for a refund, which it agreed to. However, it held onto the admin fee and credit card surcharge, amounting to about $350.

credit card surcharge refunds admin fees refunds

Is she entitled to receive the credit card surcharge and admin fee?

The devil is in the detail.

"If the agent or airline concerned is unable to provide the service as advertised, which is most likely in these times, then there should be a full refund including credit card fees," says consumer advocate Christopher Zinn.

"If the consumer has changed their mind or is unable to take the trip for whatever reason and relies on the agent's refund policy, they may be liable for the pesky admin fees and the credit card surcharge, if the small print dictates as much."

"I can't see how the agent can hang onto the surcharge if the transaction is reversed; however, getting your hands on it is another matter."

A spokesperson at the Australian Competition and Consumer Commission had this to say:

"Travel companies must act in accordance with the terms and conditions that were in place at the time a consumer made their booking. Cancellation fees can be charged or an amount retained to cover costs, if the company is legally entitled to do so under the terms and conditions of the booking."

It adds that businesses proposing to charge a cancellation fee or to retain an amount to cover expenses, should communicate to consumers, at the time the remedy is offered, the amount that will be retained or charged and reasons why; identify the legal source of their right to retain a fee; and on request, provide an itemised breakdown justifying the amount retained.

Cases like these can be murky yet all too common during this pandemic. Many factors are involved, including but not limited to the company's fine print and whether the cancellation was requested by the customer or made by the service provider.

Regardless of whether or not the trip was possible given the lockdown, the fact Kay made the decision to cancel rather than the travel company could be a deciding factor here. Full refunds are required by law if a product or service can't be provided, but it gets tricky when a trip is cancelled by a customer before the company acknowledges it can't go ahead.

We're cutting through the confusion to help you manage your money during the coronavirus outbreak. Click here for more on how COVID-19 could affect your job, budget, super and investments.

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David Thornton is a journalist at Money magazine. He previously worked at Your Money, covering market news as producer of Trading Day Live. Before that, he covered business and finance news at The Constant Investor. David holds a Masters of International Relations from the University of Melbourne.
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