DOT ISSUES MISTAKEN FARES POLICY AHEAD OF THIRD FINAL RULE ON ENHANCING AIRLINE PASSENGER PROTECTIONS
June 1, 2015
On May 8, 2015, DOT issued its long-awaited Enforcement Policy Regarding Mistaken Fares. The newly published enforcement policy is temporary pending issuance of the Department’s third Enhancing Airline Passenger Protections Rulemaking (i.e. “Transparency of Airline Ancillary Fees and Other Consumer Protection Issues”) which will specifically address the issue of mistaken fares.
As background, DOT issued a final rule enhancing passenger protections on April 25, 2011. One of the provisions in that rule, aptly named the “Post-Purchase Price Increase rule”, prohibited airlines and other sellers of tickets for air transportation from increasing the cost of a ticket after a the purchase has occurred. Under 14 C.F.R. § 399.88, a purchase occurs when the consumer pays the full agreed upon price.
On June 15, 2012, DOT responded to questions regarding the applicability of the post-purchase price increase rule to mistaken fares by stating that “if a consumer purchases a fare and receives confirmation of the purchase and the purchase appears on the consumer’s credit card statement and/or online account summary, then there has been a purchase whether or not it was a mistaken fare and the post purchase price prohibition in section 399.88 applies”. Since then, a number of mistaken fare incidents have occurred and the Enforcement Office has generally enforced the post purchase price increase rule to such fares. Noting how quickly mistaken fares are spread through postings on various websites and blogs, DOT’s May 8, 2015 Enforcement Policy advises that the Department has discretion to decide whether to pursue enforcement action in a mistake fare situation and, as a matter of “prosecutorial discretion,” will not enforce the post-purchase price increase rule in the case of erroneous fares if the carrier:
- Demonstrates that the fare was a mistaken fare (the burden is on the carrier); and
- Reimburses 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, in addition to refunding the purchase price of the ticket.” These expenses include, but are not limited to, non-refundable hotel reservations, destination tour packages or activities, cancellation fees and visa or other international travel fees.
A final rule on this issue is expected once DOT completes its review of all comments filed in response to its Transparency of Airline Ancillary Fees and Other Consumer Protection Issues rulemaking.
If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com, 202-659-6622) or Drew Derco (dderco@eckertseamans.com, 202-659-6665).