Topdeck, one of Australia’s biggest youth travel operators, has altered its refund policy and applied it retrospectively to deny refunds to customers for trips cancelled due to the Covid-19 pandemic.

The pandemic has thrown the travel sector into turmoil, forcing operators like Contiki and Topdeck to cancel trips en masse, and prompting crisis talks over the industry’s future.

Like many operators, Topdeck has been forced to call off tours until mid-2020.

Initially, it promised travellers refunds for cancellations, according to multiple customers and documents seen by the Guardian.

But last week the company told customers it had “updated” the refund policy, and would now be giving credit for future travel, plus an additional $100. The credit expires in December 2021.

The updated policy was applied retrospectively and some customers previously promised a refund were denied one.

“Through this change we are offering a credit voucher in order to travel with us in the future, which will not be redeemable for cash refunds,” the company told travellers.

It told one customer: “Please note: we are not able to process cash refunds – even if we had previously agreed this.”

The Australian Competition and Consumer Commission has issued guidance that tour operators are not permitted to change the terms of a policy to deny customers a refund if they were previously entitled to one.

Topdeck’s decision has left customers such as Claudia Jones, of New Zealand, $4,000 out of pocket. Jones had cancelled her Topdeck tour in early March and received written confirmation that she would receive a refund.

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But the refund was never processed.

“I then received an email last week stating they have updated their cancellation policy and I will only receive a credit,” she told the Guardian. “I don’t get how this is legal given I signed up and cancelled under their old cancellation policy.”

Jones has complained to the ACCC. She also posted criticism of Topdeck on the company’s Facebook page. She said her comment, along with others critical of the operator, had since been deleted.

Another Topdeck customer, who asked not to be named, said the company assured her, via a travel agent, that she would be entitled to a refund for her roughly $5,000 trip.

But the company later told her and her agent the policy had changed.

“We are offering alternative travel arrangements in the form of a credit voucher. This is in line with current travel industry and tour operator standards,” Topdeck wrote.

“This is the resolution we’re providing to you for your suspended tour and we will not be making any alterations to this. Should you wish to pursue the matter further, there are external avenues available to you to do this.”

She said she now feared she would not be able to use the voucher by the end of next year.

“I’m more worried that if travel restrictions are lifted but we are advised not to travel, they won’t extend the credit or give money back,” she said.

“The uncertainty of them having all of my money and already treating their customers badly isn’t a great start.”

Topdeck’s original refund policy states customers were entitled to a refund or “alternative travel arrangements of a comparable standard” if the company was forced to cancel tours due to extraordinary circumstances.

The company said its new policy was in line with the industry standard and adhered to the ACCC guidance.

A spokeswoman said the ACCC’s guidance also stated that customers ought to be provided a “remedy” for any cancellation, which could be in the form of “a credit note or voucher”.

The company has also waived cancellation fees and provided an additional $100 in credit to affected customers, she said, and believed it was offering a response that was “reasonable in the current circumstances, and is in line with the ACCC’s guidelines”.

“Our current position is not unique and is in line with many other tour operator and travel companies in the present environment,” a spokeswoman said. “This is generally the most popular option for customers, most of whom are looking forward to travelling with us once the restrictions are lifted.”

The spokeswoman said Topdeck was willing to consider requests for refunds in “exceptional circumstances” and that it would help customers if they had a reason for being unable to use their travel credit in the future.

The consumer group Choice said that, separately to the Topdeck case, it had received other reports of questionable behaviour in the travel sector, particularly through the charging of cancellation fees, withholding of deposits, and the failure to properly communicate consumer rights.

Choice travel expert Jodi Bird said those affected by Topdeck’s decision would have to complain to the company and raise it with state and territory authorities. Bird said the ACCC’s advice appeared to be unequivocal.

“The ACCC advice is that you can’t apply it retrospectively,” he said. “It’s pretty clear on their website.”

The sector’s peak body, the Council of Australian Tour Operators (Cato), has lodged a formal submission to the ACCC arguing in favour of credit vouchers as a way of compensating for cancelled travel.

“Cato believes that it is in the best interest of consumers that future travel credits are issued instead of cash refunds,” the organisation said on its website. “This will ensure maximum returns for each client, and help to preserve cash flows through each part of the travel supply chain.”

Contiki has also been forced to change its refund policy and is now only offering credit for cancelled tours. But the company has not applied the change retrospectively.

“Contiki hasn’t altered its terms and conditions for bookings made pre-coronavirus,” a spokeswoman said. “The team are making their way through contacting everyone, directly or via their travel agent, whose trip has been suspended to give them the options. New [terms and conditions] have been implemented but only for new bookings made since 8 April, and this is clearly noted on the website.”