Campervan renters to be refunded over “$0 liability” damage cover

Campervan rental company Travellers Autobarn Limited will refund more than $40,000 to affected consumers and provide better information about options for customers to reduce their liability in the event of damage, after signing court enforceable undertakings with the Commerce Commission.

The Australian-based business offered options for customers to cap their liability described as “$2500 Liability”, “$1200 Liability”, and “$0 Liability” in the event of damage to a hired vehicle.

However, a clause in the rental contract purported to exclude the cost of damage caused in several situations, and consumers could be held liable for more than the capped amount described in the contract.

The Commission’s investigation discovered several occasions where Travellers Autobarn used the exclusions to void consumers’ limitations of liability and hold consumers liable for significant damage costs over the capped amount. For example, one customer who had purchased the “$0 Liability” incurred an additional cost of $10,000 because of a single vehicle rollover, which was one of the exclusions from cover listed in the contract.

“In the Commission’s view, describing the options as “$2500 Liability”, “$1200 Liability”, and “$0 Liability” was likely to have breached the Fair Trading Act because those descriptions were likely to mislead consumers as to the extent of the liability protection provided. The exclusions in the contracts could result, and sometimes did result, in consumers paying more than these capped amounts – sometimes considerably more,” said Commission Chair Anna Rawlings.

Travellers Autobarn acknowledges the Commission’s view and has cooperated with the Commission’s investigation.

“It has agreed to refund the amount of $40,500 paid by customers to Travellers Autobarn for damage excluded by the relevant contract clause, and the option that was formerly described as “$0 Liability” will now include damage due to a single vehicle rollover or write off,” said Ms Rawlings.

In addition, Travellers Autobarn will ensure that the exclusions and effects of its options are accurately represented to consumers. It will:

  • ensure that its New Zealand website clearly identifies any qualifications on caps to consumers’ liability under the liability options
  • provide transparency over the three liability options and the exclusions, by setting out the exclusions in a prominent place
  • update its training processes and materials.

After following the practices and criteria outlined in the Commission’s Competition and Consumer Investigation Guidelines and Enforcement Response Guidelines, the Commission has concluded that it is in the public interest to resolve this investigation by way of court enforceable undertakings provided by Travellers Autobarn.

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