United Airlines has relented and agreed to a 60-day waiting period before imposing their new draconian billing directives issued to 28 travel agents less than a month ago. The new requirements limit the agencies to paying all credit card fees and then forwarding fare payments to United by cash transfers.
Naturally, travel agencies and their main trade association, the American Society of Travel Agents (ASTA), are up in arms. Should these changes be accepted by these 28 agencies, there is nothing to stop United Airlines from imposing similar rules on other agencies both small and large or brick and mortar and online. And once United Airlines eliminates their credit card costs, other airlines are sure to follow.
The Consumer Travel Alliance director, noted in today’s ASTA press conference that the biggest consumer problems will not only be increased costs, but the destruction of consumer protection laws that allow customers to withhold payment of credit card charges for unprovided services. When the agent for the airline becomes the agent for acceptance of credit card charges, the airlines are left off the hook.
Travel agencies who do not receive commissions from United Airlines will be forced to pass along all credit card charges in order to even break even, let alone make a profit. Adding to the legal hassles are state laws that in at least 10 states forbid any company from adding on fees for the use of a credit card. With strict enforcement of these state laws, many local travel agencies will be forced out of business.
The break between the customer and the service provider (the airline) will create another major hassle and ruin hard-fought consumer protections built into credit card legislation.
The only recourse for future service problems will be to withhold payments from the travel agents who will then have to sue the airlines for non-performance of services. Even more complicated will be charges and refunds for fees assessed by airlines when changes are made enroute during travels. Then airline charges handled by the carriers will be blended with customer charges made through travel agents and confusion will dramatically increase.
For consumers, there is nothing good in this move by United Airlines to shift the credit card burden to travel agencies or force them to book directly through United’s billing services. Consumers will lose initially by having to pay more fees and will lose their consumer rights by having their charges and protections removed from the institution that is actually providing the services.
The ramifications of this move by United Airlines is profound. The Consumer Travel Alliance will be working with DOT, ASTA and the Business Travel Coalition as well as other travel organizations and Congress to keep consumer protections intact.
Charlie Leocha is the President of Travelers United. He has been working in Washington, DC, for the past 14 years with Congress, the Department of Transportation, and industry stakeholders on travel issues. He was the first consumer representative to the Advisory Committee for Aviation Consumer Protections appointed by the Secretary of Transportation from 2012 through 2018.
