Since the US Department of Transportation initially announced its consumer protection rules regarding fare changes nearly 3 years ago there have been plenty of reasons to believe they were not long for the world. But the rules never changed. Actually they still have not changed, at least in terms of what is published. And yet the way they are enforced did change this week in a way which may have a significant impact on consumers going forward.
The impetus for the new enforcement behavior is the recent United Airlines currency conversion debacle, affectionately referred to by some as the “Great Dane” fare because it was priced in Danish Krone. United found the mistake quickly and acted quickly to notify customers that it would not be honored (well under 24 hours for purchases). And then the DoT got involved thanks to “thousands of consumers” filing claims via the DoT process. That process took several days to complete rather than several hours but the final ruling was handed down on Monday.
The short version is that United wins. OK, fine.
The longer version of the story, however, is a bit more nuanced. The DoT chose two main reasons to side with United in this instance:
- Customers had to change their billing address to Denmark, demonstrating “bad faith”
- The fare was listed in Danish Krone throughout the process so it was not targeted to US-based consumers
One part of the statement in particular has me a bit concerned:
Consistent with the Office’s treatment of fare advertisements and disclosure of baggage fees, it does not intend to enforce the rule in question (the post-purchase price increase prohibition) when the fare offer is not marketed to consumers in the United States.
This is a tough situation for the DoT because enforcing rules on a random website based in a foreign country would be an unreasonable expectation of reach and scope for the group, even if that site is selling tickets for travel in the USA . But this is a US-based airline running a website hosted in the US and selling travel on planes which are, in many cases, flying to the US. The DoT has suggested that such situations are no longer to be covered by its rules.
Buying fares originating outside the US is not all that uncommon a practice. I’m currently in the middle of three consecutive trips in which each round-trip journey starts and finishes in Europe; New York City (home) is my “destination” each time rather than the origin. One of the three was issued by United and priced in euros, not dollars. Must I forego all DoT protections because of that booking pattern? Did I misrepresent myself or otherwise buy my flights in “bad faith” because I had the tickets issued outside the United States using my NYC-domiciled credit card? I certainly do not think so, though apparently the DoT disagrees.
The letter of the law for 49 U.S.C. 41712 § 399.88(a) does not qualify the requirement that sale must be targeted towards consumers in the United States. And prior enforcement actions did not necessarily require such. Now it seems that they will. This is arguably a softening of the consumer protection regulations, though not entirely an unexpected one. The DoT has hinted previously that it was considering changes to the rules particularly to deal with the “bad faith” customers. This would seem to be the first definitive move in that direction.
The DoT previously had a “bright line” rule which seemingly protected all consumers, at least for travel to/from the USA. That is no longer the case. The protections are quickly eroding through the various “carve outs” the Department is allowing. And, given that “mistakes” were initially explicitly covered by the rules the recent adjustments seem to be a rather significant change of course from the DoT.
- Methinks I am a hypocrite
- Do airlines need protection from unscrupulous passengers??
- What is the real impact of 49 CFR 41712 § 399.88(a) for travelers?
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