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How to turn customers into critics? It’s in the fine print

Jul 12, 2010

As a lawyer, Sam Wyrick is no stranger to fine print. So when Spirit Airlines canceled his flight during its recent strike, he did what any respectable attorney would do: He read Spirit’s contract of carriage, the legal agreement between the airline and its passengers.

Unfortunately, so had the airline employee he dealt with. And Spirit apparently interpreted its own contract very differently.

“Two Spirit representatives — one on the ground at LaGuardia and one at a call center, had said if Spirit canceled our flight, we would be called and rebooked, on another airline if necessary,” he remembers.

But after it notified him that his flight to Myrtle Beach, S.C., was grounded, the airline changed its tune. It offered him a flight credit and a $100 voucher. (Never mind that Section 9.2 of Spirit’s contract suggests it owes him a refund.)

Wyrick had a better idea. After shelling out $1,220 for replacement tickets, he’s pursuing Spirit for damages. As the strike wore on, Spirit began offering some passengers full refunds, but it was clearly unhappy about having to give anyone their money back, even though it should have done so without question for every single stranded passenger.

It isn’t just airlines that are creatively re-interpreting their own terms and conditions, as well as the law of the land, to their own benefit (although there’s no shortage of airlines engaged in these practices). Other travel companies — including cruise lines, car rental agencies and, of course, travel insurance companies — also take liberties when it comes to their obligation to their customers.

These dubious, and sometimes outright fraudulent, interpretations are being implemented with the apparent blessing of management, who see the maneuverings as profit opportunities.

Me? I see them as opportunities to turn customers into outspoken critics.

Here are a few recent examples of travel companies who aren’t shooting straight: Involuntary or voluntary?

The difference can mean hundreds of dollars in compensation. That’s because the government has specific rules about what passengers must get when they’re denied boarding involuntarily. But no such rules exist if someone voluntarily surrenders a seat.

It’s a problem Denise Smith’s husband, Greg, ran into when United overbooked his flight from Washington to Toronto and denied him boarding.
Initially, she says, United didn’t offer him anything. (Under DOT rules, airlines are required to give all passengers who are bumped involuntarily a written statement describing their rights. Travelers who don’t get to fly are frequently entitled to denied boarding compensation in the form of a check or cash.)

When he told a representative he was entitled to some compensation, United offered to cut him a check — for $84. “I was able to write a complaint letter and get it to the people who had the power to resolve the issue to my satisfaction,” his wife recalled. “I received a written apology from United attached to the travel voucher I requested.”

Not a fare tax
I recently got an e-mail from an exasperated travel agent. Seems his client had to cancel a Holland America cruise, and was entitled to a 50 percent refund. But what portion of the fare was refundable?

“Holland America is refunding the government taxes, but not the port taxes,” he told me. “They claim that these taxes were built into the cruise fare and is subject to the same penalty as the fare.”

How clever. By drawing a distinction between a government and port tax, the cruise line was able to pocket 50 percent of his customer’s port taxes. Under section B of Holland America’s cruise contract, the legal agreement between it and passengers, no clear distinction is drawn between taxes and port fees.

Arbitrate this!
True story: When Ilana Goldman’s travel insurance claim was denied, her contract left her with two choices: An appeal or arbitration. Her appeal was rejected, so she took her case to arbitration. The response? “The Association declines to administer this matter,” the American Arbitration Association said in a written response. “The business in this matter has not complied with our requests in the past to abide by the Consumer Rules and/or Consumer Due Process Protocol.”

In other words, Goldman signed a contract that — because of its unique definition of “arbitration” — would send her in endless circles.
Goldman thought “arbitration” meant mediation. Her insurance company, however, thought it would get rid of her. I recommended a third option — taking her case to small claims court. Any competent judge would see the absurdity of her insurance company’s arbitration clause and rule in her favor.

Lessons learned
Question is, what do you do when your travel company tries to bend or stretch a definition? We didn’t all have the benefit of a contracts law class, but let’s go back to Wyrick, who is an attorney. He believes that even if a company’s definition prevails, their contract may not be sound.

“One of the interesting concepts covered in contract law in law school is what is known as a contract of adhesion — a contract that is totally skewed in favor of the party with superior bargaining power,” he told me. These unfair contracts are generally held as unenforceable because they offended the court’s conscience. He wondered: Was Spirit’s agreement such a contract, waiting to be tested?

I go over ticket contracts all the time, and I can think of countless other agreements that may be contracts of adhesion. But who has the time or the resources to go to court?

A faster way to get the travel company to see things your way is to appeal the creative definition to someone higher up (and hopefully, more clear-headed) than the employee telling you that the mechanical delay is an “extraordinary” circumstance, and therefore they owe you nothing under EU 261, or to arbitrate an un-arbritratable dispute, or that a port tax isn’t a tax, strictly speaking. A competent manager will listen and hopefully, do the right thing.

Failing that, there’s a new wiki of names, e-mail addresses and phone numbers of customer service managers that I’ve just created. It’s called On Your Side, and you may be able to find someone who can help.

In other words, if they’re getting creative, maybe it’s time for us to get creative, too.

How to turn customers into critics? It’s in the fine print
Image via photobucket Creative Commons


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