Credit notes or vouchers accepted in place of refunds for cancelled US flights must be non-expiring, according to new US Department of Transportation (DoT) rules.
The DoT also proposes that vouchers or credit notes offered by airlines or travel agents to passengers unable to travel due to Covid-19 or similar public health restrictions should have no expiry date.
The requirement is part of detailed DoT proposals to clarify and toughen rules on refunds in a Notice of Proposed Rulemaking (NPRM) on Airline Ticket Refunds and Consumer Protections issued this month.
The US insistence on credit notes having no expiry date is in contrast to rules in the UK where both the Civil Aviation Authority (CAA) and Abta sought to limit their financial exposure by imposing expiry dates on refund credit notes (RCNs) issued to customers for protected holidays and flights cancelled due to Covid-19.
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The CAA’s Atol-protection of RCNs expires on September 30 while Abta financial protection of RCNs for non-Atol bookings ended on January 31 this year.
However, it’s only financial protection of the RCNs that expires – the credit notes might still be used to make new bookings depending on the expiry dates and terms set by the issuers and accepted by holders at the time.
The DoT proposal applies not only to credit notes accepted by passengers in place of refunds when a flight is cancelled or a flight itinerary significantly changed but also when a flight operates but a passenger is unable to fly due to Covid-19 restrictions.
Explaining its proposal, the DoT notes complaints to the department “show numerous consumers were unable to use these vouchers before they expired during the pandemic”.
“Further, the Department is aware that some airlines and agents did not provide vouchers or refunds to consumers who were unable to travel.”
The DoT proposes to allow airlines and travel agents to offer choices of compensation for interrupted travel plans “such as travel credits or vouchers”, but consumers must be informed they are entitled to a refund before any offer is made and the offer “must not be misleading with respect to the right to receive a refund”.
It also proposes to allow airlines and agents to charge a processing fee for issuing credits or vouchers “if the fee is on a per passenger basis and appropriate disclosures were made to the consumer prior to purchasing the ticket”.
The fee must also be “clearly and conspicuously disclosed at the time of the ticket sale”.
Airlines and agents will also be required to issue “non-expiring travel credits or vouchers” to consumers prohibited from travelling “in relation to a serious communicable disease” by a stay-at-home order, entry restriction or border closure “irrespective of a public health emergency being declared”.
And they will be required to issue credits when a passenger is “advised not to travel by a medical professional” or “determines not to travel consistent with public health guidance”.
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