Travelers Are Owed Swift Refunds for Canceled Flights, Department of Transportation Warns Airlines
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The U.S. / Domestic Flights and Airlines
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The Department of Transportation (DOT) just reminded everyone that travelers are entitled to a refund (not airline credits) for canceled flights. Why? Because some airlines have recently parted from longstanding U.S. regulations that require those refunds.
On April 3, the DOT of Aviation Enforcement and Proceedings issued an Enforcement Notice firmly supporting the federal requirement that airlines issue cash refunds when they cancel flights. The notice affirms that issuing a future credit or voucher does not satisfy the DOT requirement. Failure to comply, says the notice, "could subject the carrier to an enforcement action."
Because there is an ongoing global health emergency, DOT says, the Aviation Enforcement Office will exercise "prosecutorial discretion" and allow airlines to become compliant before taking action. Presumably, however, DOT will take action against airlines if they continue to refuse required refunds. This is great news for travelers: If you're arguing with an airline about a refund, be sure to cite this notice.
The House version of the most recent $2 trillion government stimulus bill initially included mention of some important consumer protections for travelers. But those contested protections didn’t make it into the final version, which ultimately awarded airlines and airports $50 billion in loans and grants for short-term costs. And that means some big problems for travelers remain, especially as certain airlines try to cling to bookings.
Related: OP-ED: You’re Entitled to a Refund on Canceled Flights, Even in a Pandemic
Currently, the biggest problem in consumer rights is refunds for tickets on flights canceled by an airline: Some are simply refusing to do it. Department of Transportation (DOT) regulations require that when an airline cancels a flight for any reason, it owes you a full-money refund of any ticket—even “nonrefundable” ones—within seven business days for credit card transaction, 20 days if you paid by a cash card.
Instead, some airlines—most notably United, along with several giant international lines—are refusing to issue the refunds within the legally required period. Instead, they're issuing only vouchers/credit toward future travel, which some lines say they will refund fully only if not used within one year. Still, refusal to make full refunds is a clear violation of longstanding rules. It’s also worth noting that customers who accept a voucher from an airline do risk that the airline could go bankrupt in one year’s time. The DOT told USA Today it is reviewing complaints about the offending airlines, and murmurs of any bailout money going to airline executives were denied this week by ranking senators.
Consumer advocate Ed Perkins has been writing about travel for more than three decades. The founding editor of the Consumer Reports Travel Letter, he continues to inform travelers and fight consumer abuse every day at SmarterTravel.