June 25, 2020
As addressed in an earlier ASTA statement, despite being blameless with respect to travel-related cancellations resulting from the coronavirus pandemic, it is often the traveler and the travel advisor who suffer financially. This, unfortunately, is the case when a travel supplier’s existing policies governing refunds, cancellations and commissions are enforced as written despite the unprecedented nature of the circumstances necessitating the cancellation.
While that is alarming enough, far more concerning to ASTA is the number of suppliers that have elected to arbitrarily change their refund, cancellation and commission policies retroactively – after the booking has been made – ignoring state and federal consumer protection laws against unfair and deceptive practices designed to prevent just such unethical behavior. Not only is this ethically unacceptable, with state and federal consumer protection laws generally prohibiting such acts, it is simply wrong in every imaginable way. Withholding or denying refunds in breach of the terms and conditions that were in effect at the time of booking breaks the supplier’s contract with the consumer in a way that will rarely, if ever, be upheld in a court of law if challenged.
As an example, in May of this year, Pennsylvania Attorney General Josh Shapiro issued a statement that travel refund policies must be honored during the COVID-19 emergency. “If the policy says a consumer gets a full refund if an event is cancelled, that consumer better get a full refund,” said Attorney General Shapiro. “These businesses cannot sail away with consumers’ money when the trip isn’t happening or is cancelled with no reschedule date.” The supplier’s failure to honor its own cancellation, rebooking and refund policies also unfairly exposes the travel advisor to legal liability from the advisor’s client. This practice is, in a word, unacceptable.
And while the U.S. Department of Transportation (DOT) has airline oversight only, it has this to say on the refund topic: “The Department interprets the statutory prohibition against unfair or deceptive practices to cover actions by airlines and ticket agents applying changes retroactively to their refund policies that affect consumers negatively. The refund policy in place at the time the passenger purchased the ticket is the policy that is applicable to that ticket. The Aviation Enforcement Office would consider the denial of refunds in contravention of the policies that were in effect at the time of the ticket purchase to be an unfair and deceptive practice.” Clearly, the DOT’s position has merit regardless of the supplier channel.
It is unfortunate that ASTA agency members continue to report such practices which are unquestionably unethical and contrary to ASTA’s Code of Ethics every member – agency, advisor and supplier – commits to as a member of ASTA. At the same time, it is understandable that the outrage and frustration felt by both the traveling public and travel advisors in response to this issue continues to intensify.
In light of state and federal consumer protection laws, ASTA calls on suppliers that have implemented detrimental changes to their policies on a retroactive basis to reverse course and do so immediately. We also restate our prior call for suppliers to do the right thing when cancellations occur that are not initiated by the consumer. Namely, suppliers should:
ASTA applauds the courage of those suppliers who have, in stark contrast, taken the opposite approach in response to the crisis and have actually made changes to make their refund and cancellation policies more consumer-friendly while at the same time protecting advisor commissions. We commend you for a job well done, and our members and the traveling public support you.
Rebranded in 2018 as the American Society of Travel Advisors, ASTA is the leading global advocate for travel advisors, the travel industry and the traveling public. Its members represent 80 percent of all travel sold in the United States through the travel agency distribution channel. Together with hundreds of internationally-based members, ASTA’s history of industry advocacy traces back to its founding in 1931 when it launched with the mission to facilitate the business of selling travel through effective representation, shared knowledge and the enhancement of professionalism. For more information about the Society, visit ASTA.org. Consumers can connect with an ASTA travel advisor at TravelSense.org.