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Medium: Internet (Company Website), Radio
ASAI Code 7th Edition: 2.4(c), 3.2, 3.3, 3.5, 3.14, 3.15, 4.1, 4.2, 4.3, 4.4, 4.5, 4.7, 4.8, 4.9, 4.27
Radio advertising for MyRefund.ie stated:
“MVO: Have you had a flight delay for over 3 hours in the last 6 years? You may be entitled to up to €600 in compensation under EU law. Visit us at myrefund.ie or call 01-9060100 for no obligation advice. We're Irish owned and work a no-win no-fee basis, so get in touch today. That's myrefund.ie.
Weather conditions or strike actions, not covered.”
The MyRefund.ie website home page stated:
“Has your flight been delayed or cancelled in the last 6 years?
3 easy steps to claim compensation for your flight delays
Fill in the short form and give us details of delayed or cancelled flight and we will send you a refund pack.
We will send you a claim application form. Just fill it in and return it in the prepaid envelope provided
We will let you know the outcome of your claim and if successful your refund will be paid directly to you.
How is my flight refund calculated?
We can help you to your right to compensation as an air passenger. This is a legal right based on the European Union’s Regulation EC 261/2004. Whether your flight was delayed or cancelled, you are entitled to compensation.
You are legally entitled to compensation:
Flight delays within the EU
for a delayed flight of up to
for a delayed flight of over
Flight delays outside of the EU
for a delayed flight of up to
for a delayed flight of over
1,500 KM up to 3,500KM
for a delayed flight of over
We are here to help No Win – No Fee This means no risk and no hidden fees.”
The MyRefund ‘Who are we?’ webpage stated:
“Who are we?
We are a 100% Irish owned claims management company based in Dublin who specialise in reclaiming compensation for our clients who have had a delayed or cancelled flight in the last 6 years.
This is based on EU passenger rights and the airlines legally have to compensate in the cases where they are at fault. Regulation (EC) no. 261/2004.
We work on a no win fee basis, in other words, if we do not win a claim for you there is no cost incurred by you. We charge 25% of the compensation that you receive as per our terms and conditions. We take all the risk on your behalf and you are never out of pocket when we work for you.
We offer a free, no obligation assessment and if we believe we can help, we’ll get to work on your claim straight away.
What are the conditions for claiming flight delay compensation?
Your flight must fall under European Regulation, which is the case if your departure airport is in a European member state, or your airport of arrival is in a European member state and you're travelling with a European carrier.
Depending on the flight distance and the length of the delay (at least three hours) you are entitled to EUR 250 EUR 400 or EUR 600.
Contact Us on firstname.lastname@example.org or fill in our enquiry form today to find out if you are entitled to compensation.”
Ryanair objected to the advertising on the grounds that it was misleading to consumers and was contrary to the European Commission’s recommendation in its Information Notice to passengers which advised that “passengers should always seek to contact the operating carrier before considering other means to seek redress for their rights”.
Ryanair stated that irrespective of Section 7.1 of the Commission Interpretative Guidelines on Regulation (EC) No 261/2004 in which a passenger has the right to decide whether he/she wants to be represented by another person or entity or not, Ryanair has a contract with their passengers which is set out in their General Terms and Conditions of Carriage (GTCC). They said that under Clause 15.2.2 of their GTCC passengers must submit their refund claims directly to Ryanair and allow them 28 days to respond directly to the claim.
Ryanair also referred to a recent legal case in the UK in which their contractual right to have passengers submit their claims directly to them and their consequential right not to deal with claims firms such as MyRefund was upheld. In view of the ruling by the High Court of England and Wales, Ryanair considered that the position asserted by MyRefund in regards to the meaning of the Commission Interpretative Guidelines was incorrect. Ryanair said that Clause 15.2.2 of their GTCC’s was valid and enforceable and had been upheld by the High Court of England and Wales. They considered that any representation made by MyRefund otherwise was in breach of the ASAI Code. They considered that MyRefund were inducing consumers to believe that they could legally submit their claim through MyRefund without submitting directly to Ryanair as first instance and to believe that the consumer could not easily and successfully make their claim directly to Ryanair. They considered that this was to the consumer’s detriment given the large fee deducted by MyRefund and at no point did MyRefund correct these fundamental misunderstandings.
Ryanair stated that in view of the High Court in England and Wales’s decision, the Commission Interpretative Guideline must be considered in light of this and the interpretation which MyRefund attempted to place upon it was incorrect. They considered that for advertising to suggest and misrepresent, either by direct statement or omission, that airline passengers should not first submit their claims to their airline was utterly misleading and was in clear breach of the ASAI Code.
They said that the radio advertisement, which invited consumers to the MyRefund website, was directed at Irish consumers and they considered that it had the sole purpose of influencing Irish airline passengers. They said that 50% of Irish airline passengers are Ryanair passengers, a fact they considered was known by MyRefund and therefore, the advertising was directed at Ryanair passengers and was misleading them. They said that the fact that the advertising may also be addressed to passengers who have already directly submitted an unsuccessful claim to an airline did not make the advertising any less misleading in respect of Ryanair passengers who must first submit their claims directly to Ryanair. They said that the fact that some other audience group may be less misled by the advertising was not relevant to whether the ASAI Code was breached by the impugned advertising.
Ryanair considered that the advertising was directed at consumers of air travel services in Ireland and that the advertiser was claiming to be able to act on behalf of consumers in regards to the Regulation EC 261/2004 (EU261 regulation). Ryanair referred to Clause 15.2.2 of their terms and conditions which stated that “Passengers must submit claims directly to Ryanair and allow Ryanair 28 days or such time as prescribed by applicable law (whichever is the lesser) to respond directly to them before engaging third parties to claim on their behalf.” They said that this clause was designed to ensure that the claims process was free and as efficient as possible for customers. They therefore considered that MyRefund had no entitlement to represent approximately 50% of the consumers its advertising was directed at until those consumers had availed of the above clause. They considered that the advertising should include an exception in regards to Ryanair customers who have not first submitted their claim to Ryanair.
Ryanair noted that MyRefund had claimed that their advertising did not mention Ryanair and that because they deal with EU legislation covering all EU airports and EU airlines, it was accurate to say that Ryanair customers accounted for 50% of their business.
Ryanair considered that the issue was not whether Ryanair customers accounted for 50% of MyRefund’s business but rather that the predominant audience for the advertising was Ryanair’s customers. They also considered that it was irrelevant whether MyRefund might be able to offer services outside of Ireland, or whether they did in fact offer services outside of Ireland, their advertising was clearly directed at Irish consumers and the predominant audience was Ryanair passengers.
Ryanair considered that the advertising was inducing consumers to breach the terms that they have already agreed with Ryanair and also that it would cause approximately 50% of relevant consumers to submit claims via MyRefund in circumstances where MyRefund had no entitlement to submit claims for those consumers.
Ryanair also stated that passengers tended to make claims in the first few months following a disruption, therefore it was likely that MyRefund’s advertising had the potential to affect 100% of passengers actually making claims.
Ryanair considered that the advertising gave consumers the impression that MyRefund’s service was more beneficial than it actually was, given that claiming directly from Ryanair was a better option for consumers financially, as MyRefund deducted 25% plus VAT from consumers’ compensation.
Ryanair considered that the overall misrepresentation of the advertising was that consumers were better off with the MyRefund service when they were clearly not. They referred to the findings of the High Court of England and Wales which had confirmed that Ryanair had “established a straightforward and easy-to-use process for its passengers to make their flight delay compensation claims” and stated that there was no evidence to suggest that MyRefund’s processes were similarly easy to use. They noted that MyRefund imposed an additional layer between the airline and the passenger which delayed and created a greater administrative burden for both the consumer and the airline in processing the claim. They considered that should this element of the complaint not be upheld, it was conveying a message that the passenger should not first go to their airline. They considered that this falsely implied to the passenger that they were better offer engaging MyRefund because their claim could not be easily made to the airline and/or would not be successful if made directly to the airline. They said that once the misrepresentation was made by MyRefund, they had then ‘locked-in’ or convinced the consumer that the consumer’s only route to a successful claim was to use MyRefund and pay a fee for that service. They considered that it removed the consumers’ choice. Therefore, whilst MyRefund might correctly state in the advertising that the service was conducted on a ‘no win – no fee’ basis, they were, in fact, being allowed to convey this information based on false and misleading messaging, that the consumer’s only real option to claim their refund was to use MyRefund and pay that fee.
Ryanair considered that their passengers were better off making their claim directly to Ryanair as their claims process was easy, user-friendly and was free. They said that they do not charge passengers for making claims and they do not deduct a fee or VAT from their refund, therefore any advertising that falsely suggested or implied to any passenger with a potential claim that they would be better off not coming directly to Ryanair and instead paying a fee for an unnecessary service must be deemed to be misleading and was in breach of the Code.
Ryanair considered that the radio advertising conveyed misleading messages to consumers who were being led to believe that they had no choice but to pay a fee to get their refund. They said that once the refund had been conveyed, the consumer was not disabused of it, and they were led into a transactional decisions they would not otherwise make. They said that if the level of the fee was identified in the radio advertising, some consumers might second-guess the value of the service and might be more likely to explore their options with the airline. They considered that the advertising implied that consumers were better off with MyRefund’s 25% fee plus VAT when they were not.
Ryanair stated that MyRefund should be required to confirm, as part of an obligation to inform passengers that they first contact their airline and first submit any refund claim directly to their airline, that those passengers may avail of the airline’s refund claims service for free.
Ryanair considered that the advertising was in breach of the Code as it was not made clear that the compensation payable would be net of VAT. They referred to the fact that MyRefund charged 25% commission on any compensation payable to consumers and that this added to the VAT could mean that a consumer would only receive 60% of their commission.
Ryanair also stated that, in addition to omitting to mention VAT, it was misleading of MyRefund not to present the consumer with the total price inclusive of VAT.
In regards to the section of the European Commission’s Information Notice referred to by Ryanair in their complaint, MyRefund noted that a further extract of this notice had not been included with Ryanair’s complaint. This extract stated: “As mentioned in Section 7.1 of the Commission Interpretative Guidelines on Regulation (EC) No 261/20043, a passenger has the right to decide whether he/she wants to be represented by another person or entity or not.” They also said that they have dealt with Ryanair where many cases were settled and in some cases these were done under the jurisdiction of the District Court.
They said that Ryanair have and do deal with them and their solicitors and must do so as per the EU261 Regulation
They said that they offered their clients a no obligation service and they had the choice as to whether or not to engage with them. They also said that many of their clients would have tried and had been refused compensation by Ryanair and other airlines. They said that they take on any client who chooses to have representation as is their right to do so. They said that if the complaint were to be upheld on the basis of the terms and conditions of one airline, it would be a miscarriage of justice.
MyRefund noted that Ryanair stated that there was no need for their company to exist and asked why Ryanair did not automatically apply the compensation to the client’s card used at the time of their booking. MyRefund considered that the complaint by Ryanair was part of a cost saving exercise initiative by them as the less passengers that know about their rights, the less Ryanair would have to pay out.
MyRefund responded, firstly stating that at no stage in their advertising had they mentioned Ryanair or their customers. They also said that they deal with EU legislation concerning all airports in Europe and all European airlines and that it was inaccurate to say that Ryanair customers’ accounted for 50% of their business.
They said that their business existed as there was a genuine need from consumers to have assistance enforcing their rights in accordance with EU 261 Regulation and that they were endorsed by many people in Ireland, including an MEP. In response to Ryanair’s Clause 15.2.2, MyRefund stated that approximately 40% of their clients had already approached the airline and had been ignored or refused before engaging their services. They said that their advertising did not target any airline as they were raising awareness of a regulation that the airlines seemed to be very quiet about.
They said that they have over 5,000 happy customers who would never have known that they were entitled to compensation without their advertising.
In regards to Clause 15.2.2 of Ryanair’s terms and conditions, MyRefund stated that this term was only introduced in July 2016, therefore, based on this they estimated that only approximately 16% of Ryanair passengers that may be due for compensation are under these new terms as they make claims for passengers for travel over the past six years.
Issues 4 & 5:
In response to the complaint regarding the declaration of their charges, MyRefund said that before signing up to their service, a client is provided with a copy of their terms of engagement that must be signed and returned to them. They said that this document set out clearly that their fee was 25% plus VAT which was a standard fee in the claims management industry. They said that they did not advertise this fee on the radio as the fee was only payable once the client engages their services and their initial advice was free without any obligation and they considered that their website was for information purposes.
The Executive requested comments from Ryanair in regards to Section 7.1 of the Information Notice of EU261 Regulation which advised that a passenger had the right to decide whether he/she wanted to be represented by another person or entity or not.
In reply Ryanair said that Clause 15.2.2 of their general terms and conditions was consistent with the European Commission’s Information Notice. They said that the clause placed no restriction on a passenger’s entitlement to consult a legal adviser or other third party at any stage and did not restrict their right be represented by a lawyer in court or litigation. They said that the clause was designed to govern the quick, pre-action disposal of claims. Finally they said that the clause was a fair and binding term.
In a response to a request by the Executive as to how customers of MyRefund, who have not made a direct claim with Ryanair, are handled, MyRefund declined to comment on how they treat individual airlines as they did not believe that it was a valid complaint.
The Executive noted relevant extracts of the European Commission’s Information Notice to Air Passengers(1) as follows:
“Passenger should always seek to contact the operating carrier before considering other means to seek redress for their rights.
As mentioned in Section 7.1 of the Commission Interpretative Guidelines on Regulation (EC) No 261/2004, a passenger has the right to decide whether he/she wants to be represented by another person or entity, or not”
(1) Source: https://ec.europa.eu/transport/sites/transport/files/2017-03-09-information-note-air-passenger-rights-on-claim-agencies_en.pdf
The Complaints Committee considered the detail of the complaint and the advertisers’ response. The Committee noted the information provided about the complainant’s contractual terms.
Issue 1: Complaint Not Upheld
The Committee noted that at no stage in the advertising was a reference made to any airline. The Committee noted the terms and conditions of carriage of the complainant and the complainants’ reference to a ruling by the High Court of England and Wales which had found that the complainants’ contractual term requiring their passengers to submit their flight disruption claims in the first instance to the complainants was not “unenforceable by virtue of Article 15.1 of the Regulation.”(2)
In assessing the advertising, they considered that it was for a service that could be used by any consumer who wished to submit a claim against any relevant airline and that the consumer could have already submitted an unsuccessful claim directly to any airline and then have engaged the services of the advertisers.
The Committee noted the relevant advice of the European Commission in their Information Notice to Air Passengers that (1) passenger should always seek to contact the operating carrier before considering other means to seek redress for their rights and that (2) a passenger has the right to decide whether he/she wants to be represented by another person or entity, or not. They noted that the advice at (1) was not mandatory.
The Committee did not consider that a requirement by a company (which they could enforce) that consumers must first engage in an internal compensation procedure would necessarily result in advertising for the existence of a third party service being misleading. In the circumstances, the Committee did not consider that the advertising was likely to mislead on the basis set out in Issue 1.
Issue 2: Complaint Upheld In Part
The Committee noted that no reference had been made to any specific airline within the advertising, however, they considered that as the advertising had appeared on Irish media, it was therefore targeting Irish consumers. They noted the advertisers’ comment that some of their clients were customers of airlines who had been unsuccessful in their attempt to claim directly.
The Committee noted that passengers could submit refund claims for the preceding 6 years, and could engage third parties to claim on their behalf against one leading carrier prior to July 2016. Nevertheless it was not made clear in the web content that claimant’s entitlement to representation may be effectively deferred because of the airlines’ contractual terms. As the claim on the web ad content was absolute in stating “we’ll send you a refund pack”, rather than indicating that eligibility would be assessed, the Committee considered that the web content was likely to mislead consumers. In the circumstances they considered that the website was in breach of sections 4.1, and 4.2 of the Code.
The Committee noted that the radio advertisement offered a phone in service with ‘no obligation’ advice being available. They did not consider a breach of the Code arose under this complaint issue in relation to the radio advertisement. .
Issue 3: Complaint Upheld
As above, the Committee noted that Ryanair introduced Clause 15.2.2 in July of 2016 and therefore, any claims through third parties by customers whose flights pre-dated July 2016 were not contrary to the complainant’s then terms and conditions of booking.
The Committee noted the advertisers’ position that a relatively low volume of passengers with a leading carrier may be affected post July 2016 by that carrier’s relevant terms and conditions. Nevertheless, as the claim on the web ad content was absolute in stating “we’ll send you a refund pack”, rather than indicating that eligibility would be assessed, the Committee considered that the web content was likely to mislead consumers and was therefore in breach of sections 4.1 and 4.4 of the Code.
Issue 4: Complaint Not Upheld
The Committee noted that the radio and website advertising had both stated “no win – no fee”, which they considered alerted consumers to the fact that a fee was applicable. Under the terms of the ASAI Code, the Committee were aware that there was no obligation on advertisers to include the price of their product or service within their advertising. The Committee noted the tone and content of the radio and webpages and did not believe that the material contained any content which was likely to mislead consumers regarding delivery of the advertising promise.
Issue 5: Complaint Upheld
The Committee noted the website advertising on the “Who are we?” webpage stated the actual percentage rate charged before, and without reference to, VAT. The Committee considered that as the advertisers had expressed a specific charge, the omission to make any reference to associated VAT was likely to mislead consumers and this was in breach of sections 4.1 and 4.4 of the Code.
The advertising should not run again in its current format.
(2) Regulation (EC) No 261/2004