USDOT & Mistake Fares
Over the past few years we have seen quite a few mistake fares. Sometimes a “0” was dropped from the fare and sometimes it had to do with fuel surcharges or currency conversion. One thing was common to all of them though. If the ticket touched U.S. soil, it had to be honored.
The reason these fares had to be honored was 14 CFR 399.88 which prohibits airlines from raising a rate after selling a ticket to consumers. Over the years the airlines have fought to get this rule changed and the DOT began an investigation looking into it last year.
Then earlier this year we saw the United mistake fare which required customers to falsify their country to get the price. Many people thought the DOT would force United to honor it, but they sided with the airline which set a dangerous precedent. Now the DOT has released their new enforcement policy for mistake fares and it definitely favors the airlines.
New DOT Enforcement Policy for Mistaken Fares
Let’s break down some of what they said in their release:
As a matter of prosecutorial discretion, the Enforcement Office will not enforce the requirement of section 399.88 with regard to mistaken fares occurring on or after the date of this notice so long as the airline or seller of air transportation: (1) demonstrates that the fare was a mistaken fare4 ; and (2) 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.
So the new requirements state that the airlines have to demonstrate the fare was a mistake. They also must reimburse consumers for their reasonable expenses. Those expenses include:
These expenses include, but are not limited to, non-refundable hotel reservations, destination tour packages or activities, cancellation fees for non-refundable connecting air travel and visa or other international travel fees. The airline may ask the consumer requesting out-of-pocket expenses to provide evidence (i.e. receipts or proof of cancellations) of actual costs incurred by the consumer. In essence, the airline or seller of air transportation is required to make the consumer “whole” by restoring the consumer to the position he or she was in prior to the purchase of the mistaken fare.
I should be clear that this is not a rule, but simply an enforcement policy regarding the existing rule. The rule as it is written is still in place for now. While the enforcement policy could change at any time, here is what they have to say:
The enforcement policy outlined in this notice is temporary and will remain in effect only until the Department issues a final rule that specifically addresses mistaken fares. If, based on comments received in the rulemaking process, the Department determines that section 399.88 should remain as written, airlines and other sellers of air transportation would be expected to comply and the Enforcement Office would enforce the requirement.
So it seems like in most cases, airlines will be able to back out of mistake fares as long as they make the consumer whole for nonrefundable expenses. While this is just an enforcement policy, I can’t see the DOT publishing this if it is vastly different than the new rules they are considering.
Conclusion & More Info
For more analysis, I highly suggest taking a look at this post from the Wandering Aramean. Do you think this is the right decision or should airlines be forced to honor mistake fares? Let me know in the comments.