United credit card move undermines consumer protections

by Charlie Leocha on June 30, 2009

United Airlines by trying to foist credit card fees onto their agents is striking a blow against consumer protections offered by credit cards. Any way United slices their business, they are still, in the end, the service provider and should be liable to credit protections for services not rendered.

By shifting the credit card processing fees to travel agents, the credit card users will only have recourse against the agent should United fail to provide services. This newest United Airlines move to save themselves money comes at the expense of consumers across the country and their protection, not only at the cost of an additional three percent or so to travel agencies.

Janice Hough writing late last week in Tripso noted that additional problems will be created by adding a layer between the airline and the customer for everything from refunds and ticket changes to cancellations and mechanical problems.

This disconnect between the passenger and the airline (the client and the service provider) will have unintended consequences, should the airlines need refund airfares to make changes during a customer’s travels. Are the airlines now going to have to forward all necessary changes and credit card refunds back through the travel agent for approval? The paperwork and legal liability mess will be profound.

According to the Consumer Travel Alliance, a member of the Consumer Federation of America, even more worrying is the break between the airline and their customers from a contracting point of view and payment (consideration in legal terms). Should United, and other airlines, be allowed to force uncompensated agents to shoulder their credit card fees, legal experts will have to revise current contracts of carriage for these customers.

A situation will arise where passengers booked through travel agents, both brick and mortar and online travel agencies such as Expedia, Priceline, Travelocity, Orbitz and others have a different set of consumer protections and contract rights than those who book directly with United Airlines.

This United Airlines concept that has been “run up the flagpole” in order to test the ire it might create, is an ill-advised move by a flailing airline running out of ways to meet its cash demand requirements.

The Consumer Travel Alliance is writing to members of the House Committee on Financial Services and the Department of Transportation asking them to explore the ramifications of an action as that proposed by United on consumer protections and airline contracts of carriage.

Print Friendly
Be Sociable, Share!

Previous post:

Next post: