A consumer advocacy group has lodged a formal complaint with the Australian Competition and Consumer Commission (ACCC) about Qantas's flight credit policy.
Choice said the airline's flight credits scheme was "unfair and unworkable" and it might involve "potential unfair contract terms and misleading and deceptive conduct".
Choice spokesperson Dean Price said Qantas was placing unreasonable barriers in the way of travellers trying to redeem their credits or get a refund from cancelled travels.
"The Qantas flight credits system is currently unworkable for most customers."
Mr Price added that one of the key problems many passengers faced when trying to use Qantas credits was they could only use credits for flights that cost the same or more than their original fare if they originally booked after September 30, 2021.
Qantas confirmed the value of outstanding flight credits was $1.4 billion and the airline had extended the validity of the majority of flight credits which could be used for travel up until the end of 2023.
"At the start of the pandemic, we removed a lot of the rules that we had around fares and offered more flexibility for flight changes and cancellations than ever before," a spokesperson told the ABC.
"We did put some fare rules back last September when borders began to stabilise, which means customers can choose not to take a flight and still retain that value in a flight credit, but it does need to be used on a new booking of equal or higher value.
The ABC previously reported that some Qantas passengers said they were worse off when redeeming a credit and they accused the company of "price gouging".
But Qantas CEO Alan Joyce rejected the allegation, saying customers "get the exact same as what you paid for".
Choice has asked the ACCC to investigate whether Qantas has breached the misleading and deceptive conduct provisions under section 18 of Australian consumer law.
It has also asked the consumer watchdog to examine if misleading and deceptive conduct has occurred in relation to the treatment and communications about flights sold to customers.
The ACCC told the ABC it would consider the information provided by Choice as part of its ongoing investigation.
"This has included seeking information over the past few weeks from consumers about their experiences using Qantas flights credits."
One in four people have flight vouchers expire
Last month, a national report by Choice found 72 per cent of people had received a flight voucher due to COVID-19-related flight cancellations.
However, more than one in five people (21 per cent) had been unable to use their vouchers after their flights were cancelled due to COVID.
One in four people had flight vouchers expire before they could use them.
Michael Harding is one of many passengers who lost their money on flight credits.
The retired veteran had three trips to Hervey Bay cancelled in 2020 due to COVID-related travel restrictions.
He said he was offered flight vouchers from Qantas totalling $1,000, but all of them expired in January and February last year.
He added that due to border closures by the Queensland government, he was unable to use them in time and Qantas wouldn't issue him a refund.
Last week, when Mr Harding was trying to book a trip to Hervey Bay, he had to wait for hours on the phone to Qantas call centre so that he could use a flight voucher issued from a cancelled trip in August.
He said people expect better customer service from Qantas.
"I think it's a ploy that people get so frustrated and forget it, don't worry about it.
"That's probably just a cynic in me, but that's the way I feel."
Qantas apologised to its customers on the excessive call centre wait time, saying it was "not acceptable".
"Our call volume has increased from an average of 7,500 calls a day to 14,000 calls a day, with calls on average taking 50 per cent longer to resolve than pre-COVID," the company said in a statement.
"We've already added hundreds of staff to our call centres, and each month we are recruiting and training more people."
Consumer group Choice has called for a mandatory information standard, with clearer terms and conditions, for all travel service providers.
"A simpler and more accessible system for re-booking flights and getting refunds would assist customers to get value from the money they have paid to the company — whether that is a flight or a refund," Mr Price said.
The NSW government is currently considering such a standard.
