Mark Pestronk
Q: I read that the DOT recently relaxed its rule requiring that airlines always honor their fare-posting mistakes. Does the new policy apply to travel agencies that make mistakes in quoting airfares? Specifically, if I quote an airfare that is below the correct fare to which the client is entitled, do I have to honor the quote and absorb the loss? What if the quote is for a package that includes air? I know that, if the package doesn't include air, then the DOT has no jurisdiction over it, but would I have to honor the quote as a matter of general contract law?
A: The DOT rule adopted in 2011 prohibits airlines and other sellers of air transportation from increasing the price of air transportation after a purchase has occurred. According to the rule, a purchase occurs when the full agreed-upon amount has been paid by the consumer.
Under the literal language of the rule, the airline was bound even if the consumer must have known that the fare was a mistake, as happens from time to time.
Once the consumer made his purchase, the airline was bound even though, for example, a website programming error changed the correct fare from $1,000 to $10.00.
In mid-May, the DOT issued a statement of enforcement policy effectively changing the rule, at least until the department finishes its pending proceeding on ancillary fees and the like, which will now encompass the mistaken-fare issue as well.
Under the new policy, the carrier can get off the hook if it can show that the fare was indeed a mistake and that the carrier "reimbursed all consumers who purchased a mistaken fare ticket for any reasonable, actual, and verifiable out-of-pocket expenses that were made in reliance upon the ticket purchase, such as nonrefundable hotel reservations, destination tour packages or activities, cancellation fees for nonrefundable connecting air travel and visa or other international travel fees."
When the DOT finalizes its rule on ancillary fees, it will probably permanently adopt the new policy. It is fair and logical, especially where the consumer obviously must have known that the fare was a mistake.
An agency selling an airline ticket is subject to the 2011 rule as well as the new statement of enforcement policy. If you refuse to honor a mistaken quote, and the client complains to the DOT, you would either have to honor the error or prove that you made a mistake and reimburse the client for any lost travel costs.
In addition, the rule probably applies to packages sold by travel agencies that include air as a mandatory component, such as when you put together a package and sell it at a price that includes air plus land or a cruise.
In theory, if you flatly refused to honor the mistaken price without offering to reimburse the client, the DOT could fine you up to $27,000. In practice, however, the client is more likely to sue you in small claims court.
Whether you would win in court depends on the relevant contract-law precedents in your state, but as a general rule, the courts will not require any seller to honor a price that the buyer knew was a mistake and bought the ticket or package anyway, hoping for a windfall.