€1-million fine for easyJet and Ryanair
The Autoritá Garante della Concorrenza e del Mercato (AGCM) – the Italian competition watchdog – has fined Ryanair and easyJet a total of €1 million for mis-selling travel insurance on their websites. The AGCM said both airlines had broken its customer code by failing to supply adequate information to customers, or by giving them misleading information. The unfair practices under scrutiny included a lack of transparency about the travel insurance that customers were being offered during the online buying process, as well as problems with the customer claim pathway. The AGCM thus punished Ryanair with a fine of €850,000, while easyJet suffered a €200,000 fine, which the AGCM said was because it had already made necessary changes to its booking process to ensure customers were no longer being mis-sold cover.
When customers were taken through the booking process and offered insurance as part of their purchase, both companies apparently failed on several counts: to make the excess payable clear; to make it clear that taxes and airport charges were covered; and forcing claimants to call a premium rate phone number to obtain a certificate to prove they had not travelled on a flight. Such a certificate costs €20 from Ryanair and €12 from easyJet. According to the AGCM, all of the above are instances where the airline already had the necessary information, ‘and could easily have given it to the insurance company without any burden to consumers’. The AGCM then suggested that by putting barriers in the way of claiming, such as a high excess and a charge for the certificate, customers were being deterred from making a claim on their policy – data collected by the organisation showed that an ‘extremely low’ percentage of travellers attempted to claim on their policy from either airline. Furthermore, Ryanair’s method of selling a policy to a customer involved the customer being automatically ‘opted in’ to buying the cover, and in order to get out of the purchase, the customer had to choose a ‘No grazie’ option from a long drop down list of countries of residence.
easyjet issued a statement following the fine that read: “All of the issues raised in the decision have already been remedied in consultation with the AGCM and our insurance partner, Allianz. easyJet will examine the decision and review its options.” Ryanair responded: “We note this ruling and while we disagree with its findings and have instructed our lawyers to appeal, we will be amending our website accordingly.”