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The Korea Herald
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THE INVESTOR
March 29, 2024

Retail & Consumer

FTC charges Airbnb with expediency on refund rules

  • PUBLISHED :September 28, 2017 - 17:20
  • UPDATED :September 28, 2017 - 17:20
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[THE INVESTOR] The Fair Trade Commission said on Sept. 28 that it had decided to charge the Irish office of global lodging giant Airbnb for ignoring corrective orders on the contractual terms of its cancelation penalty.

This is the first time that the watchdog is to file a charge against a foreign business operator over noncompliance with a domestic act on the regulation of terms and conditions.




In November last year, the FTC ordered Airbnb to correct its damage compensation clause, which imposes a 50 percent penalty on users who cancel their reservations with seven or more days remaining to their stay at a lodging.

The company then revised its terms to allow a 100 percent refund for cancelations made 30 or more days ahead of the date of a stay and a 50 percent refund for those made afterward.

The service provider, however, kept the renewed terms hidden from lodging hosts in Ireland and only informed them of the new rule when a Korean user made a reservation, the FTC said.

“The system may take a toll on Korean consumers as lodging hosts may reject the reservation calls (by Korean users) when they face a sudden alteration in terms,” said an official of the watchdog.

“This is a clear noncompliance to the (FTC) order, as well as an unfair business practice which causes consumer damages.” 

By Bae Hyun-jung/The Korea Herald (tellme@heraldcorp.com)

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