What amount can I claim as a cancellation fee?


May 2, 2013 Facebook Twitter LinkedIn Google+ Your Rights & Responibilities



What amount can I claim as a cancellation fee?

If you charge a customer a cancellation fee, booking fee or administration charge (including any held deposit or advance payment), the fee should not be excessive and should be limited to the costs of booking accommodation and/or the costs of making the accommodation available to the customer. A cancellation fee should be based on the principle of fair compensation for legitimate costs incurred by the booking agent or property owner. In setting cancellation fees, a booking agent should take into account the likelihood that losses can be limited by rebooking with another consumer when an accommodation booking is cancelled. The scope for limiting loss through re-booking diminishes closer to the accommodation booking date. However, the extent and level of the loss depend on each booking agent’s circumstances. If the contract term allows you to reclaim losses from a consumer that could have been avoided had you taken reasonable steps to do so, this may be deemed an unfair contract term under the FTA. For example, if you claim 100 per cent of the accommodation booking from a consumer regardless of when the booking is cancelled, this could be regarded as an unfair contract term.

Comments