Voicing concerns about the DOT's refund rule: Travel Weekly

Mark Pestronk

Q: In the Aug. 29 Legal Briefs column, you answered a bunch
of questions about the DOT’s proposed rule that would make travel agencies
responsible for refunds for canceled and substantially delayed flights. What
the DOT wants to do is just so incredible. In any case, I have a few more
questions. First, what is the deadline for filing comments in opposition to the

A: The deadline is Nov. 21. In our comments, you can ask for
a public hearing on the proposed rule, and if the DOT agrees to hold a hearing,
which it probably will, it will be held early next year.

Q: Do I need a lawyer to represent my agency and submit

A: No, but having a lawyer draft comments in the formal way
that airline and other association lawyers do tends to ensure that the DOT will
take the comments into account and refer them in the final rules explanatory statement.
On the other hand, if you just submit a letter or send an email, you will
probably be lumped in with all the other commenters who oppose the rule.

Q: Just the week, ExpressJet Airlines and its subsidiary or
division called Aha! filed for bankruptcy and shut down. It is fairly obvious
that the carriers do not have the money to make refunds. If our agency had sold
an Aha! ticket, would we be obligated to make the refunds out of our own
pocket? If so, by what deadline?

A: Yes, you would be so obligated. The deadlines would be
seven business days for credit card sales and 20 days for cash sales. These
deadlines would apply regardless of whether the client has already asked the
credit card company to reverse the charge and regardless of whether the carrier’s
bankruptcy proceeding might result in a refund. I know that sounds crazy, and I
have to believe that the DOT will create exceptions.

Q: I understood that the airlines and travel agencies can
issue credits or vouchers if the client agrees. How can we issue a voucher on
our own?

A: I don’t see how you can unless the airline sets up some
sort of voucher process that agencies can utilize. Certainly, ARC will need to
be involved in the process.

Q: Since the vast majority of travel agencies in the U.S.,
including home-based independent contractors, don’t have the money to make
refunds and there is no way for them to issue vouchers, why does the DOT want
us on the hook?

A: The DOT’s rationale is that “which entity is in
possession of the funds would not necessarily be clear to the consumer because
multiple entities may be involved in the transaction process.” So the consumer
may look to either of them and may start with the agency.

Q:The proposed rule document is 116 pages long. Can you
refer us to a good synopsis of the key points.

A: The best one I have found is at www.cozen.com. Click on news and events and search
publications for “DOT issues.”

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