As the coronavirus outbreak continues to ripple across the globe, a proposed class action lawsuit has been filed over an educational travel company’s alleged failure to issue sufficient refunds for canceled student tours.
Filed against EF Institute for Cultural Exchange, Inc. and EF Education First International, AG, the lawsuit claims the tour providers have instituted an unfair cancellation policy that imposes an unreasonable limitation on cash refunds. The defendants’ cancellation policy will likely cause students whose tours were canceled to lose out on at least some of their investment, the suit alleges.
According to the case, the defendants sold tours to public and private high school groups pursuant to a written contract of adhesion that contained what the complaint refers to as the “No Public Health Emergency Cash Refund Clause.” Under the clause, if an EF tour is canceled “for public health issues or quarantine or threats of public health issues,” the defendants will issue travel vouchers for the value of the money paid, excluding certain non-refundable fees, instead of providing cash refunds, the suit explains.
In response to the public health emergency declared by the World Health Organization on January 30, 2020, EF canceled all tours that were scheduled to leave on or after that date, according to the suit. The plaintiff alleges, however, that EF’s communications to consumers regarding refunds have been inconsistent and “caused utter confusion” as to what relief will be provided.
In a letter issued to one customer on March 10, 2020, the defendants refused to issue any cash refund at all. A few days later, EF responded to an earlier complaint submitted by the plaintiff to the Arizona Office of the Attorney General in which the defendants allegedly offered the plaintiff a partial cash refund of $1,000 less than what she paid for her child’s tour. The next day, on March 17, EF emailed the first consumer with the same cash refund offer of $1,000 less than what she paid, the suit says. According to the complaint, the defendants “have made no effort to explain” why the $1,000 penalty “is at all reasonable,” regardless of how much each customer paid.
Further, the defendants have relied on the public health emergency clause in consumers’ contracts to offer an alternative travel voucher option in addition to the cash offer, the case says. The lawsuit argues that the clause constitutes an unlawful business practice under California law in that:
The defendants placed the clause in their 2019-2020 adhesion contracts despite being aware of the “potentially calamitous effects” of global public health emergencies that “have long been predicted as very likely to occur”;
The contract was presented to consumers on a “take it or leave it” basis;
Consumers were “lulled into a false sense of security” since trusted teachers acted as the middlemen between the students and EF, leading consumers to believe that EF had their best interest in mind;
A public health emergency would likely result in EF not being able to schedule any future tours and could hinder the defendants’ ability to honor the travel vouchers; and
The defendants knew it would “not be realistically possible” for students to reschedule their tours in light of a public health emergency and they would likely lose some or all of their pre-paid deposit.
The plaintiff suspects that EF’s conduct has affected “tens of thousands” of consumers. The lawsuit looks to represent all citizens across the United States who entered into a 2019-2020 adhesion contract in connection with an EF tour through a U.S. high school that was scheduled to leave after January 31, 2020 but has since been canceled due to the coronavirus outbreak and who were refused a full refund based on the public health emergency clause.
Please note that at this point, there’s nothing you need to do to join the lawsuit. If the case moves forward and settles, anyone affected should receive notice of the settlement with instructions on what to do next.
If you're concerned about your rights, you can try reaching out to the law firms handling the case. Their contact information can be found in the complaint below.
Want class action news sent to your inbox? Sign up for ClassAction.org's newsletter here.