DOT Cranks Up Pressure on Airlines to Issue Refunds for Canceled Flights

DOT Cranks Up Pressure on Airlines to Issue Refunds for Canceled Flights

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When an airline cancels your flight that touches U.S. soil, they owe you a refund – not just a voucher. The same is true if they significantly change your flight schedule. That’s the law in the U.S.

But airlines aren’t always playing nice. After United, JetBlue and others denied refunds, the U.S. Department of Transportation (DOT) warned carriers last month to follow the rules and start issuing refunds. But that wasn’t enough.

More than a month later, many airlines aren’t properly informing travelers when a refund is available. The department received more than 25,000 complaints a month against airlines in March and April – up from the norm of 1,500 a month.

So the U.S. government is laying down the law again. On Tuesday, the DOT issued yet another notice spelling out exactly when airlines owe refunds and how fast they should issue them. And it warns one particular airline that it’s engaging in “an unfair and deceptive practice.”

Here’s what the Department is telling airlines, and what travelers need to know in order to get a refund.

 

What’s a “significant change” or “cancellation” that requires a refund?

The law is clear that when an airline cancels or significantly changes your flight, you’re owed a refund.

Unfortunately, it’s less clear about what constitutes a “significant change.” The DOT has left it up to airlines to decide for themselves – and they have made different decisions. Here’s a quick look at how the major U.S. carriers determine what triggers a refund:

  • Delta: A change of 90 minutes or more
  • American: A change of four hours or more
  • United: A change of six hours or more

 

Most airlines will also issue refunds after adding a connection to nonstop flights. But safe to say it varies greatly by airline.

Read More: How to Get a Refund Instead of a Voucher

 

What rights do passengers have if they choose not to travel?

If you choose to cancel your flights due to health concerns surrounding coronavirus, you won’t get a refund. The best you can do is get a voucher for future travel – and only if your flight qualifies for a free-change waiver.

“Although not required, many airlines are providing travel credits or vouchers that can be used for future travel for those passengers electing to cancel their travel due to health or safety concerns related to COVID-19,” the department wrote.

Each airline has different policies and dates for which flights qualify for free change and cancellation. Check your airline and make sure your flight qualifies for a voucher before canceling.

Read More: Canceling Flights? Use This Flowchart to Make the Right Decision

 

What about tickets purchased from an online travel agency?

Book your ticket through an online travel agency (OTA) like Expedia, Orbitz, or CheapOair? Don’t worry.

The DOT makes clear that “ticket agents are required to make proper refunds when service cannot be performed as contracted on a flight to, within, or from the United States.”

That means you’re owed a refund from your travel agency if the airline cancels or significantly changes the flight, the airline acknowledges you are due a refund, and you’ve paid for the ticket. You’ll just have to work with the travel agency to get it.

Read More: How to Change or Cancel Travel with OTAs Like Expedia, Priceline, and More

 

What about airlines that change their refund policies?

Here’s looking at you, United.

The Chicago-based airline has been notorious for refusing refunds and changing what’s eligible. Before coronavirus upended the travel world, United’s policy was to offer refunds for changes of two or more hours.

In March, United changed that to require a whopping 25-hour change in order to dole out refunds. Finally, it has settled on a six-hour change policy to issue refunds. 

But the DOT isn’t happy. The department made clear that the policy in place when you booked your ticket is what should apply if your flight is canceled or changed. So if you bought a United fare back in January, a two-hour change to your trip in June should trigger a refund.

“The Aviation Enforcement Office would consider the denial of refunds in contravention of the policies that were in effect at the time of the ticket purchase to be an unfair and deceptive practice,” the department wrote.
 

Can airlines offer credits or vouchers instead of refunds?

Many airlines have failed to tell travelers when they’re eligible for a refund. Some have only mentioned vouchers as an option – or given out a voucher for a canceled flight without asking.

The DOT made it clear Tuesday that travelers on a canceled or changed flight must be given a choice. Failing to do so is a “deceptive practice.”

“Airlines and ticket agents can offer consumers alternatives to a refund, such as credits or vouchers, so long as the option of a refund is also offered and clearly disclosed if the passenger is entitled to a refund,” the department said.

Read More: Airlines Aren’t Telling Passengers When They’re Eligible for Refunds

 

How quickly should refunds be processed?

We’ve seen and heard horror stories about travelers waiting for refunds to hit their accounts for a month or more. It’s commonplace now.

The DOT says that’s unacceptable.

“Airlines and ticket agents are required to make refunds promptly. For airlines, prompt is defined as being within seven business days if a passenger paid by credit card, and within 20 days if a passenger paid by cash or check,” the department wrote.

The DOT noted that huge volumes in cancellations mean it may take longer. Still, the department

The Aviation Enforcement Office recognizes that it may take longer because of the volume of cancellations due to COVID-19. However, if the airline does not seem to be making a full effort to refund passengers the DOT will take action. In that respect, they’re giving airlines some wiggle room.

The DOT said they won’t “take action against airlines for not processing refunds within the required timeframes if, under the totality of the circumstances, they are making good faith efforts to provide refunds in a timely manner.”

 

Bottom Line

More of this, please. Airlines are doing everything they can to withhold refunds – and some are acting more egregiously than others. It’s refreshing to see the DOT act as an ally for consumers seeking to get their money back.

If you’re struggling to get the refund you’re legally owed, you can file a DOT complaint here.

 

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.

6 Responses

  • why are only 3 airlines mentioned here? How about foreign airlines which fly to US? My money is stuck with Fiji airways.

  • So, what’s the remedy when United adheres to their current policy of a 6-hours vs. 2-hours delay (in an airline initiated change) constituting a valid delay to trigger a refund? In short, what can I do when United ignores DoT (yet again) and I need to cancel my flight this week since the scheduled departure is 5/16/2020?

  • Further, what is the remedy when an airline (United, again) without discussion issued a voucher when a refund was appropriate, what I wanted, but was issued via an OTA.

    • The answer to both of your questions is to start by filing a complaint with the DOT. In both circumstances, United can and should retroactively issue a refund for your flights.

  • What is the definition of “proper refund”? In my case, I booked through an OTA… the original credit card charge and subsequent refund was directly from the airline, however the OTA charged my card a $100 fee for “processing” the refund. Looking at the DOT guidelines it has a condition that the funds must be held by the OTA which in my case were not.

    I do not understand why DOT makes all these guidelines that has loopholes the size of Texas in it that OTAs can exploit… just clearly state that the OTA has to ensure that the customer gets the full refund and no extra fees are to be charged.

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