Be Wary! Massive Changes to Brazil’s Cancellation / Refund Laws.
Be wary of any bookings you have or are considering involving Brazil. As of Wednesday, April 9, 2020, Brazil’s consumer protection laws suffered major changes. These are not friendly to the end consumer and create major changes in cancellation and refund laws/policies.
The Temporary Law
MP948, a temporary law, was signed by Brazil’s President (Jair Bolsonaro) on April 9, 2020. The new law gives agencies more time to refund customers during the COVID-19 pandemic. It applies to events, tours, hotels — pretty much anything related to tourism.
Under the new law, the sales agency must:
- reschedule the event within 1 year
- offer a voucher/credit to the consumer
- create another signed agreement to honor the consumer’s original purchase
These things sound pretty standard. It’s what we’ve come to expect because of coronavirus-related cancellations around the world. Airlines, hotels, and the like offer us vouchers, and we are used to how this works. The real kick in the pants comes when you say you don’t want these and just want your cash back.
Under the new law, the agency is not required to refund your payment until 12 months after the declared end of the pandemic by the Brazilian government.
To say it again, it’s from whatever future date Brazil’s government officially says the COVID-19 pandemic is over. From that date, the agency has 12 months to repay you.
This is a huge change. First, we don’t know when Brazil’s government will declare the pandemic to be over. Second, adding 12 months to that massively delays when you can receive a refund. Realistically speaking, it could be September or October 2021 before you get your money back. This applies to events you’ve booked and those you might be considering booking. Be wary if you’re considering bookings with anything in Brazil through a Brazilian company (i.e. an independently-owned hotel, LATAM / GOL / Azul airlines, concert tickets, etc.).
Why The New Law?
According to Brazil’s minister of tourism (Álvaro Antônio), the goal is “to work so that the losses are not even greater. It is necessary to think about the after also and guarantee the right of consumers and entrepreneurs and this set of measures is to guarantee the future of our tourism and our culture”. The new law comes after an 85% cancellation rate in Brazil’s tourism sector in March 2020.
Final Thoughts
As people start thinking about the end of the quarantine and life post-COVID-19, be wary of booking anything in Brazil right now. I live in Brazil, and this new law doesn’t really surprise me, as industries are scrambling to hold onto cash at present. However, this isn’t the best for consumers who want their money back to allocate cash to other bills during this hard time.
As you start thinking about travel for the future, you’re safer booking through agencies that have friendly cancellation / refund policies. See our lists of hotel cancellation policies and airline cancellation policies. Be wary of booking anything with a Brazilian-based agency right now. Your money might get tied up for an extended period of time if there’s a cancellation / rescheduling.
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Well, flights booked to/from the US are also governed by the US Department of Transportation so you have so protection there at least.
So the conflict becomes how soon you’d get it. DoT and Brazilian law both say you can have a cash refund, there’s no disagreement there. The issue is timeline, and that can come down to who has the final say over the particular airline.
Is this law retroactive? That’s to say: for refund requests already submitted to the airline (LATAM, for example), can they rely on this new rule to refuse the refund I’d otherwise be entitled to by the rules in place at the time I bought by tickets?
It doesn’t specifically say one way or another, but 2 important things in the original text:
1. it says anything related to tourism sector that was affected by the pandemic
2. it says law effective yesterday
The agencies have 90 days to work out an agreement with the affected customer (ex: telling you the new concert date) and then the later date if you opt for reimbursement. To me, I wouldn’t be surprised at all if this applies retroactively. Not mentioning it will obviously lead to some agencies applying it that way and others not, until guidance comes out.
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