DOT continues to ride airlines about refunds after colossal rise in complaints

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DOT continues to ride airlines about refunds after colossal rise in complaints
Photo Credit: Oliver Le Moal/Shutterstock

With April consumer complaints having come in at more than 15 times higher than the usual pace, the Transportation Department has issued a new guidance document on airline refunds.

The document reasserts that airlines must offer refunds when they cancel flights, but the guidance will likely disappoint consumer advocates who have been pushing for carriers to allow for refunds when the passenger decides to cancel. 

In both March and April, the DOT said it received more than 25,000 complaints and inquiries related to travel services provided by airlines and airline tickets agents, including OTAs and traditional travel agencies. That’s compared with 1,500 in a typical month. Many of the complaints concerned refunds. 

This latest notice reiterates the position laid out by the DOT in an April 3 enforcement order that airlines must offer refunds to passengers still ticketed at the time a flight is canceled.  The department also stated that airlines cannot retroactively change refund policies after a ticket is sold -- a move that had been attempted most notably by United Airlines early in the Covid-19 crisis.

Credit card refunds are required to be paid within seven business days of a request and cash refunds must be paid within 20 days, though the DOT said it would provide carriers with reasonable leeway on those requirements to accommodate heavy volume.

The document also makes clear that airlines aren't required to pay out refunds to customers who cancel tickets on flights that operate.

“Passengers who purchase a nonrefundable ticket on a flight to, within, or from the United States that is still being operated without a significant change but would like to change or cancel their reservation are generally not entitled to a refund or a travel voucher for future use on the airline,” the DOT said. “This is true even if the passenger wishes to change or cancel due to concerns related to the Covid-19 public health emergency.”

That clarification likely won’t sit well with consumer advocates. On Wednesday, Consumer Reports and the nonprofit advocacy group U.S. Public Interest Research Group (PIRG) plan to deliver petitions to airlines calling for refunds, including for passengers who made their own cancellations.

The advocacy groups along with Sen. Edward Markey (D-Mass.), also said in a press release that for flights airlines cancel, “some carriers are offering vouchers as the default option, forcing passengers to take extra steps to get the cash refund they deserve.”

In its Tuesday guidance, the DOT said that airlines can offer such vouchers as long as they also clearly disclose when a passenger is entitled to a refund. 

“If an airline, by representation or omission, engages in conduct that is likely to mislead consumers about their right to a refund or the value of a voucher or credit that is offered, the Aviation Enforcement Office would deem such conduct to be a deceptive practice,” the department said. 

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