Bach rental complaints add up

Holiday rental company Bachcare has been the subject of two Commerce Commission investigations in the past four years, writes Esther Taunton.

Astring of complaints from disgruntled customers this summer are the latest in a series of problems for holiday rental company Bachcare. The business has been criticised after dozens of customers received incorrect or no access information for their accommodation over the Christmas break, leaving them stranded.

In some cases, customers resorted to breaking into holiday homes after multiple unsuccessful requests for help from Bachcare’s customer service staff.

Others complained of overgrown, dirty and poorly equipped properties, some with no hot water or gas for cooking.

But this is not the first time Bachcare has come under scrutiny. The company has been the subject of two investigations by the Commerce Commission in the past four years.

Founded by Leslie Preston in 2003, Bachcare was New Zealand’s first full-service holiday rental provider, offering a booking service, cleaning, and guest management.

By 2018 it had nearly 2000 holiday homes across the country on its books, more than 135,000 annual customers and revenue growth of 35 per cent yearon-year, Preston said at the time.

The biggest challenge was finding people around the country to take on the management of properties, she said.

‘‘It’s been a challenging road to get to the size and scale we have now. Years and years of hard work, blood, sweat and tears.’’

In 2016, a British holiday rental firm, Sykes Holiday Cottages, invested an undisclosed sum in Bachcare.

The move was said to give Bachcare access to the technology, tools, people and insights of Sykes, one of Britain’s largest independent holiday rental agencies, with almost 14,000 properties across Britain and Ireland.

Sykes was sold three years later in a deal reportedly worth about £375 million (NZ$750m), and European private equity firm Vitruvian Partners took a majority stake in the business.

Around the same time, Bachcare began to run into trouble.

In December 2019, it was fined $117,000 for misleading consumers by editing and, in some cases, not publishing online reviews.

Bachcare pleaded guilty to two charges under the Fair Trading Act after an investigation by the Commerce Commission.

The commission said that between June 2017 and September 2018, the company had edited customer reviews and removed negative comments about properties listed on its website, and its management of properties.

Reviews with less than a 3.5 out of 5-star rating were not published at all.

Bachcare had misled consumers by creating artificially positive impressions about some properties and its services, the commission said.

Commission chairwoman Anna Rawlings said online reviews were an important source of information for consumers contemplating the purchase of goods and services.

‘‘In this case, consumers had no way of knowing that star ratings were inflated, or that the text of some reviews had been edited to cast the property in a more positive light.

‘‘This type of conduct undermines the trust that consumers will place in reviews of products or services.’’

In his sentencing judgment, Judge Swaran Singh said while the harm caused by Bachcare’s misconduct couldn’t be quantified, it infringed the Fair Trading Act.

‘‘It compromised the interests of the consumers, fair competition and an environment in which consumers and businesses participate confidently,’’ he said.

In October, the commission announced another investigation into Bachcare’s practices, this time in relation to its cancellation policy.

The investigation was launched following a number of complaints to the commission, including one from Consumer NZ over what it called ‘‘unfair’’ cancellation fees charged by both Bachcare and Airbnb.

Consumer NZ chief executive Jon Duffy said complaints about the sites had risen since the start of lockdown in August, and some customers had been left hundreds of dollars out of pocket.

‘‘Consumers who had booked accommodation but couldn’t travel because of the lockdown told us they’d been denied a full refund,’’ Duffy said.

‘‘Even though they couldn’t use the accommodation, through no fault of their own, they were informed they wouldn’t get their money back. That’s plainly unfair.’’

A commission spokesman said the main factor that determined a consumer’s rights when travel could not take place were the terms and conditions agreed to at the time of the booking.

Consumers should look for a clause that explained what happened when a contract was cancelled or when there were events beyond human control, he said.

At the time, a Bachcare spokesman said it was dealing with many people affected by the situation New Zealand was in due to Covid-19.

‘‘We are doing our best in what is a challenging situation for all,’’ he said.

Bachcare’s cancellation policy was updated following the first lockdown last year to ensure it was fair for both the customers who book with the company and the property owners it represents.

The spokesman said a clause in Bachcare’s cancellation policy stated that in situations where a customer elected to cancel, its standard terms applied.

‘‘On those occasions where the cancellation is out of the control of both parties, we offer a credit to be used at a later time.’’

The commission said it had received 60 complaints about Airbnb and Bachcare cancellations or refunds since November 2020. Of those, 50 were about Airbnb and 10 about Bachcare.

Consumer NZ reviewed the booking sites’ cancellation policies and believed they risked breaching the Fair Trading Act, which bans unfair terms in consumer contracts.

Bachcare’s cancellation policy stated the customer would lose all accommodation fees and the service fee, even if they cancelled 60 days before the start of their stay.

Duffy said the charges were excessive. ‘‘If an accommodation provider imposes a cancellation fee, it can’t just charge whatever it wants.’’