What's the book corporate America doesn't want you to read? Find out now -- or you could get scammed.

Like it or not, airline tacks $10.95 travel insurance to ticket

August 21, 2008

Angela Gross thought she was booking an airline ticket on Frontier Airlines’ Web site. Turns out she was buying more than that.

After finishing the transaction, she discovered she had also signed up for a $10.95 insurance policy. How did that happen? A small box at the bottom of the booking screen was pre-checked, indicating she also wanted to buy the policy.

It was up to her to uncheck it.

Unfortunately, this box is very hard to even notice this until after the purchase is made and you receive an email providing the travel insurance information. It should not be a default setting to purchase travel insurance.

She’s right. Other travel companies have done this in the past, and it just infuriates customers. What’s more, it’s not a generally accepted practice in the electronic commerce world. You ask customers to opt-in to a newsletter or product — even when you’re bankrupt.

Gross received an email a few minutes later.

From: Policies [mailto:policies@travelguard.com]
Sent: Wednesday, August 13, 2008 8:33 PM
To: Gross, Angela
Subject: Travel Guard Policy #905033614

ANGELA GROSS,
Thank you for purchasing a travel insurance plan from AIG Travel Guard.

*******************************************************
*Your policy number is: 905033614
*******************************************************

*We invite you to view/print your travel insurance documents
*If you have any questions please contact our 24-hour World Service Center at:

Enjoy your travel and thank you for choosing AIG Travel Guard for your upcoming trip!

She contacted Frontier, but it said it couldn’t help her because her policy was underwritten by AIG. I emailed both the airline and insurance company on her behalf. AIG spokesman Dan McGinnity said Gross should be able to get a full refund for her policy.

We are a third-party provider of a value added service that Frontier offers it clients. Many airlines and travel suppliers now offer travel insurance and feel it is an important component of the overall travel purchase.

We do offer a full refund for clients who decide they do not want the travel insurance protection, as long as they contact us prior to their trip.

Less than 1/2 of 1 percent of those who purchase our travel insurance from the Frontier Airlines Web site have requested a refund.

For its part, Frontier has promised to “track down what happened” and report back to me. Here’s what spokesman Steve Snyder had to say about the case:

I know Angela shouldn’t have been told we can’t do anything for her. She should be given a full refund. I’ll get back to you shortly with a thorough explanation of all this. Sorry Angela had to go through all this.

Gross remains indignant, and rightfully so. “I can’t even imagine how much money these guys are making off of innocent mistakes,” she told me.

Neither do I. But I think they should stop.

Update: Here’s Snyder’s follow-up response:

Ms. Gross should not have been told that Frontier can’t help her. When we have questions about the travel insurance, we reimburse the customer immediately, with no questions asked. I’m not sure why that didn’t happen in her case, but we will contact her and fix that.

As to the larger question of whether we are trying to sneak something by our customers, we don’t believe we are. When we first started the “opt out” option instead of the “opt in”, we received a number of questions from people who felt the information was not displayed prominently enough. Perhaps that’s when Ms. Gross had the issue.

We made some changes to try to make it as obvious as possible. The questions have dropped significantly since, and we now know that 75 percent of the people booking on our web site are unchecking the box. I would encourage you to go through the process of booking a ticket and see for yourself. We think it’s quite prominent.

And that brings us to the other 25 percent. Those are the people who are buying the insurance, and those are the people we were not reaching when we had the “opt out” option. Our typical web site consumer is buying tickets about 45 days out. Those who are buying the insurance are typically buying more than 60 days out. We believe those people are buying the insurance for the extra piece of mind.

That falls in line with why we offer the flight insurance. Quite frankly, we are selling a product that we believe in. Currently our change fee is $150 plus difference in fare. The travel insurance covers the items that typically cause people to change their flights, and we think $10.99 insurance is a better deal than a $150 change fee plus fare difference.

However, we realize some people don’t agree, and we have made it very obvious how to uncheck the box. Even if our customers miss that, they can always call to get a refund immediately, no questions asked, and they can do it up until the time of their flight.

We certainly apologize that Ms. Gross didn’t receive better customer service when she tried to get this issue resolved, and we will be contacting her to resolve the matter.

Christopher Elliott is the author of Scammed: How to Save Your Money and Find Better Service in a World of Schemes, Swindles, and Shady Deals. Critics have called it “eye-opening” and “inspiring” — it’ll “grab your attention and won’t let go.” Order your copy now on Amazon, Barnes & Noble or iTunes.

Tagged as: , ,

18 comments

  • http://www.stephenpickford.com Stephen Pickford

    I have often found with these cozy airline/insurance relationships, that, even if you were willing to buy the insurance they offer, you would have to spend considerable time trying to find out if you were actually covered within all of their conditions….i.e. even though you are departing from Canada, I have seen policies that will not cover Canadians….and vice versa….offering insurance for a passenger departing from IND on the CO website that then stated that she had to be a Canadian resident for the insurance to be in effect…

    As for the opt-out clause of Frontier’s website, remember that this is the firm headed up by Sean Menke, who started the flood gates opening on the nickel-and-dime “unbundling” of fees (the $7 sandwiches, the $3 discount for not checking a bag, whatever and ever) when he was a VP at Air Canada, so he has plenty of experience on the multiple fees front.

  • Victor

    That’s pretty crummy on Frontier’s behalf. But I imagine that when they do respond, they’ll claim the pre-checked opt-out box for the insurance was an innocent programming error, and they certainly never meant to deceive anybody. To paraphrase Captain Renault, they’ll be “shocked, shocked” to discover this kind of thing is going on.

    I think they should start writing a bunch of checks for $10.95.

  • http://claystorm.livejournal.com Kevin Muray

    Part of me really wonders if this is such a bad thing. I mean, they are already in Chapter 11 Bankruptcy, and considering how many airlines have been dropping like a rock, it really is not too far to say they could go Chapter 7 if things keep getting worse. That 10 dollars might save some people some major money down the road, cus we have all seen where paying customers fall when a company is in bankruptcy (Chapter 7 or 11).

    Now with that said, I do think that maybe they should not hide it so much on there site. If I remember right, the last time I booked thru AA, I had to “uncheck” the travel insurnace box, but it was a little more in your face then Frontier’s seems to be.

  • John

    I just went out to the Frontier site to try this out. Unless they have re-designed it already (which, in and of itself, would show quick response to customer feedback), I do not find the opt-out section for this insurance “very hard to even notice.” It is the same size font as the flight information, has a full-sized grey header bar, a full-color logo for AIG Travel Guard, and bright blue text stating ‘If you do not want to purchase travel insurance, please uncheck the box above.’ Also, you have to scroll past this section to get to where you enter your credit card information. Consumers need to be aware on EVERY e-commerce site these days, and I think it is unfair to single out Frontier on this one, nor do I fault them for attempting to increase revenue on their site.

    - A loyal Frontier (non-employee) Frequent Flyer member

  • Carver Farrow

    @john

    I have to respectfully and strongly disagree. As Chris correctly states, opt-out provisions are not considered an acceptable or ethical way to do business. Opt-out provisions are generally the purview of shady operators and Spam merchants. They operate on the sole premise that same percentage of the buying public won’t notice the little extra transaction. Shame on Frontiers for descending into the muck and mire just to earn a few extra dollars.

  • Joe Mosman

    The box is pre-checked. “Yes, I want to purchase AIG insurance”. In huge blue letters going accross the entire page it clearly states PLEASE UNCHECK THE BOX ABOVE IF YOU DO NOT WANT TO PURCHASE AIG INSURANCE.

    I don’t see how much clearer it could be. If you pay the slightest bit of attention to what you’re doing you would not be “duped” as this person, and Chris Elliott, are claiming.

    Come on!

  • Christopher Elliott

    I’m glad to see that Frontier has updated its Web page. Nice work!

  • Joe Farrell

    Does ANYONE think the insurance covers the airline going out of business?

    Lets get the actual insurance ‘policy’ and see what it says – mind you almost EVERY state has a rule against marketing a fee waiver or fee reimbursement scheme as ‘insurance.’ Where is AIG licensed since this not AIG insurance company backing this product – there is no guarantee fund for this – AIG Travel services goes belly up when Frontier stops honoring tickets and exactly how do policy ‘holders’ get their money?

    Ever read a travel policy? Pre-existing conditions are not covered? Been treated for say, high blood pressure? Get a heart attack and be unable to travel – guess what? No coverage since HBP is a symptom of coronary disease. This list is endless folks.

  • Shane

    I just received an email from Frontier today about their mileage program (Early Returns). All of the fees have been raised (more than double in some cases). The amount of miles needed for a one way ticket went up 50% and 33% for a round trip. Looks like Frontier is looking like all the other airlines.

    Chris,

    I emailed you the letter for your information.

  • J C

    Spirit also does the opt out for insurance. they also include an opt out for their $9.00 fare club for a double bubble. Cute. Both of these boxes are clear and in full view. If you are paying attention you will see it, but i’m sure some people don’t pay attention and this is what they are counting on.

    They could just as well display these boxes and ask people to opt in if they wish.

    You shouldn’t be required to opt out of an automatic tack on, especially Spirit’s $9.00 club.

    It’s Tacky

  • http://protoscholar.com Rebecca

    Be warned – AIG is NOTORIOUS for using the information it gathers to market excessively to everyone whose name they get. They will call 2-3 times per day, and claim that you are a client.

  • Beth

    Actually, “opting-out” is quite common, whether it’s ethical or not. You see it all the time when you sign up for newsletters and such, and these “add ons” to airfare and other travel services are becoming more common as partnerships strike up between companies.

    I personally don’t like opt-outs but noticeable or not, it’s up to customers to read the fine print when they book.

    And no, that $10.95 is not going directly to Frontier. I’m guessing they get a few bucks as commission, that’s all. The rest goes to AIG.

  • Jim

    A buyer should not have to uncheck boxes to NOT buy unnecessary, peripheral items. Especially when the vast majority of their customers do not want the additional product.

    When you go through the McDonald’s drivethru, they don’t automatically add fries to your order and make it your responsibility to tell them you don’t want fries.

    Of course, we know why they do it. That 25% of upsales would be considerably less if buyers had to express a desire for the other product.

  • noah

    While opt-outs may not be “industry standard,” they are quite common. This should be a lesson to consumer to review all of each page they click through when making online purchases. That said, I also think that it was right that this person got a refund.

  • http://xrrf.blogspot.com simon hb

    Did I read the Frontier response correctly there – “good lord, with outrageous change fees like we screw you over for, you’re gonna need insurance if you buy a ticket with us”?

  • Joel Maron

    I had the same problem with Frontier. I missed unchecking the box and was stuck with insurance I didn’t want. I feel totally cheated. It’s a sleazy practice. And contrary to what their spokesman told you above, they do not immediately refund the money with a call. I had to call customer service, then call AIG and then send an email to AIG requesting a refund. This just happened today, but I have yet to receive a reply. This one second mistake has cost me a lot of time and frustration. I have no respect for this type of practice. Who is Frontier kidding?

  • Rosemary Olson

    I have just the opposite problem. I purchased a ticket for my husband to go hunting in Bozeman, MT and purchased trip assurance, you never know if you are going to get sick or something! Our something turned out to be a tornado hit our farm, we had over $80,000. dollars damage and 5 months later can not get in to some parts of our cow pasture, no fences means the cows can’t go there either. My husband has been exhausted all summer trying to catch up and can’t possibly leve on a hunting trip.I contacted accessamerica, NW insurance company stating on 9/5 and I finally got a letter from them today 10/14 and the trip was to leave on 10/9. They only care if our house is uninhabitable which its not(Thank God)but I still paid for insurance that isn’t worth anything.Nothing like stalling a customer. Anybody else with accessamerica nightmares out there?

  • Pingback: Oops! Airline tacks $10.95 travel insurance to ticket | Galaxy Shopping

Previous post:

Next post: