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Travellers have accused budget airfare website Bestjet of misleading behaviour, saying it is cancelling reservations and asking for more money for new flights.
Customers told Fairfax Media the Brisbane-based company offered cheap flights but cancelled their reservations shortly after payment due to what it said were credit card concerns.
The company has denied any wrongdoing, saying it was simply protecting customers from fraud.
Disgraced former Air Australia boss, Michael James was banned from managing corporations for three years after the collapse of Air Australia in 2012.
Bestjet was set up by the wife of disgraced former Air Australia boss, Michael James, shortly after the collapse of the airline in 2012.
It lost its travel agency accreditation after it failed to show Mr James had no involvement in the company. The company is currently fighting the decision in court.
Paulina Olszanka said she booked flights to Poland through the company in March but had her reservation cancelled after she failed to respond to an email asking her to confirm her credit card details.
Paulina Olszanka said she booked flights to Poland through the company in March but had her tickets cancelled after she failed to respond to an email asking her to confirm her credit card details. Photo: Don Ryan
"When I called them up, to be told that I'd lost my booking, they still had my money," she said.
"So my booking with Emirates had lapsed but Bestjet.com still had my money."
Ms Olszanka said by the time she tried to confirm her details, Bestjet told her the price of the flights had gone up by $200.
"They gave me the opportunity to either rebook my Emirates flight [for an extra $200] or otherwise refund the money," she said.
Bestjet told Fairfax Media its concerns about fraud were legitimate and spelled out in the company's terms and conditions, which are agreed to by customers.
It said the amount customers had to pay to rebook their flights depended on the airline and how quickly customers responded to the email.
"In that time, the fares can change, which is controlled by airlines," Craig McKim-Hill, a spokesman for the company, said.
Bestjet could not say why it did not check the credit card details before charging customers.
Csaba Varga told Fairfax Media he demanded a refund from Bestjet after it cancelled his flights to Hungary over similar concerns.
He said he became suspicious of the company after it asked him to send a scanned copy of his ID and credit card.
"At first, I was suspicious, as I have never encountered any of this nonsense when buying tickets online. I asked Bestjet in a reply email why the credit card detail was asked for," he said.
"About 12 hours later I received a reply again about fraud. In less than 60 seconds, not even giving me the chance to act on the response, I got a cancellation email.
"I called them up querying the conduct and asking them how I could defraud myself by buying a ticket with my debit card for myself? In the interim, the price moved up by $200."
The Australian Competition and Consumer Commission said it was concerned about any business offering a product or service at a particular price and not honouring that representation.
It encouraged any affected consumers to contact it.
Mr James was banned from managing corporations for three years after the collapse of Air Australia in 2012, which left investors, creditors and ticket holders almost $100 million out of pocket.
Mr McKim-Hill said Mr James was "no longer with the company".
Bestjet customers have also complained about cancellations costing hundreds of dollars and taking months to be issued.
One customer, David Greig, told Fairfax Media it took six months and cost him $800 to receive a refund for $5000 of flights to Canada he was forced to cancel due to medical reasons.
"I don't know who had my money. I assume they were holding it in an account accruing interest," he said.
The company said the length of time it took to refund customers depended on the airline and other ticketing third parties.
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