In many ways this seems like a silly question. How could it be possible that customers can be protected too much from companies they do business with, companies which generally speaking are operating with more information and more control of any particular transaction? And yet here we are, waiting for the dust to settle on the latest airline mistake and waiting to hear how the Department of Transportation, the group responsible for regulating the aviation industry, will rule on the situation.
I do not think that there is anyone out there is going to argue that the most recent situation with United Airlines – tickets to, from or via Hong Kong available for only 4 miles without any inventory restrictions – was a mistake. Unlike some other mistakes this isn’t even one that any rational person could claim was even close to reasonable. But that seems to matter less and less these days, in large part to consumer protection rules put in place by the DoT recently. In fact, the DoT has explicitly stated in their FAQ on the rules that "…the seller of air transportation cannot increase the price of that air transportation to that consumer, even when the fare is a ‘mistake.’"
I understand writing the rule this way. It makes sense in many ways. It is a bright line that makes it nearly impossible for any situation to come down to arbitrary judgments or interpretations. The rule is what it is and there’s no way around that. So what happens when it really is a mistake, not a shady company trying to pull a fast one on unsuspecting customers? Well, rules are rules, right?
At this point the answer to that question isn’t entirely clear. A DoT spokesperson has been reasonably clear thus far on applicability of the rules vis a vis award tickets: just because they are paid with points which the programs claim are their property, not yours, the airlines cannot escape the rules there. So that part is cleared up. There are still a few things out there that I can see United playing to try to make this go away, and I’m sure they’ll try some I haven’t considered, too. But the question remains: If it obviously is a mistake should the company be held responsible?
The easy answer per the rules is that they should. After all, they are the ones who made the mistake, not the consumer. But does that necessarily result in the best protection for customers? Maybe not.
Yes, the customers affected by the mistake are going to get what they bargained for. But there is also the question of how that gets paid for in the end. In a case like this, where a mistake is made, does it end up being paid for by the regular folks, the normal consumers, who the rules are arguably supposed to be protecting? Put another way, if the company raises fares to cover for the mistake they made, does the greater populace suffer at the expense of the few? And isn’t that the antithesis of what consumer protection rules should be about?
Back when the 3-hour tarmac rule was implemented, and again just over two years ago when the DoT changed a number of other rules, I wrote about the underlying basis of these rules. It is a clause in the CFR which prohibits unfair and deceptive marketing practices. I called it a slippery slope, basically giving the DoT free reign very much in the same way the airlines previously held it.
It is hard to reconcile a "mistake" with "unfair and deceptive" some days. Is there a better way? Should there be?
- What is the real impact of 49 CFR 41712 § 399.88(a) for travelers?
- Following the revocation of the United 4 mile awards the crazies come out
- And so it goes; the 4 mile awards are to be revoked
- New consumer protections on offer from the DoT
- Department of Transportation institutes a 3-hour rule
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