United Airlines has officially backed away from shifting merchant fees associated with processing credit card fees to travel agents. After an aggressive Capitol Hill campaign against United’s effort to squeeze travel agents into accepting the resulting fees by the American Society of Travel Agents (ASTA) and a parallel consumer effort by the Consumer Travel Alliance (CTA) involving the Federal Reserve Board and credit card issuers, the airline decided not to proceed.
For consumers this action had far-reaching consequences since many credit card protections may have been endangered, or access to these protections would have become far more complicated. Of course, Travel Agents would have faced a dramatic increase in fees and would have had to pass them on to consumers, adding a financial harm as well.
This combination of ASTA and CTA efforts together with support from Business Travel Coalition (BTC) was one of the first times that these organizations worked on the same side of an issue in Washington. Since then they have partnered on the Mad As Hell About Hidden Fees campaign and continue to work together to get more transparency for consumers, business travelers and agents of ancillary fees.
The American Society of Travel Agents says United sent letters to impacted agencies last week indicating that the policy is withdrawn and they would not be subject to any penalties retroactively.
The airline caused a major stir when it adopted a policy on June 15, 2009, that barred a limited number of travel agencies — initially 28 — from using United’s merchant account when booking United tickets for clients on credit cards.
The move was widely viewed as a trial balloon by United to shift merchant fees from the airline to travel agencies and take a chunk out of its distribution costs.
According to the Federal Reserve Board, all consumer protections are still in place for passengers who purchase airline tickets with credit cards. The Consumer Travel Alliance suggests that any major travel purchase be made with a credit card since any non-delivery of service can be contested through the credit card company. Having the power of American Express, Mastercard or Visa on your side in a disagreement with airlines or other travel providers is a giant help and often will result in faster customer-service action and better results.
Since, these credit card companies are some of the airlines’ biggest creditors, they wield amazingly persuasive powers when it comes to bargaining with a less-than-friendly airline over customer-service or bankruptcy issues.
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.
