Q: An article in Travel Weekly’s May 16 edition, “Searching for air, flyer beware,” covered false and misleading practices by agencies that advertised online. Among the practices noted was quoting a fare on the telephone that the consumer later found out included a $511 agency fee in one case and a $466 agency fee in another case. Essentially, the agency was marking up the fare by 30% to 50%, which is unheard of. Isn’t it illegal for agencies to charge such exorbitant fees without disclosing the correct airfare and the added fee? Also, the story says agencies masquerade themselves online as airlines and lead callers to believe they’re speaking with the airline. Isn’t this illegal, too?

A: Under DOT regulations, the markup practice is not only not illegal, but the DOT has specifically indicated that breaking out the markup or fee is strictly optional. On the other hand, if an agency passes itself off as a carrier, it is definitely in violation of DOT regulations.

The DOT’s full-price rule states:

“The Department considers any … solicitation by … a ticket agent [i.e., travel agency] … that states a price for such air transportation … to be an unfair and deceptive practice … unless the price stated is the entire price to be paid by the customer to the carrier, or agent, for such air transportation, tour or tour component. Although charges included within the single total price listed (e.g., government taxes) may be stated separately, the total price must be displayed more prominently than the separately listed components.”

I italicized the word “may” to show that it is not legally necessary to break out any component of any quoted price in an ad or telephone solicitation. So if the carrier’s fare is $500, the agency can say, “the price is $1,000” and leave it at that. When the current version of the full-price rule went into effect about a decade ago, I don’t think anyone anticipated the kind of abuse covered in the article.

By the way, if you call an airline for a price quote, the airline employee will always say “including all taxes and fees” after the fare quote, but this phrase is not necessary under DOT rules. 

Some carriers have agreements with all ARC-appointed agencies. These agreements take the form of “supplements” to ARC’s standard agreement. 

Interestingly, the American Airlines supplement does state, “If agent charges a customer a service or other fee for its services, such charge or fee shall be listed separately … .” However, I don’t know of any other carrier with such a rule.

As far as masquerading as a carrier, the DOT’s rules are clear: “It is the policy of the Department to regard as an unfair or deceptive practice or unfair method of competition … misrepresentations which may induce members of the public to believe that the ticket agent is an air carrier.”

So the agencies mentioned in the Travel Weekly article could be subject to civil penalties of up to $35,188 per violation. 

Source: Read Full Article