In yet another sign that the Transportation Department is serious about protecting the rights of consumers, the government this morning fined US Airways $40,000 for failing to disclose the full price consumers must pay for air transportation.
“When consumers shop for air travel, they have a right to know how much they will have to pay,” Transportation Secretary Ray LaHood said in a prepared statement, adding, “We will continue to ensure that airlines comply with our price advertising rules.”
Here’s the full consent order (PDF).
The DOT’s Aviation Enforcement Office found that when consumers searched US Airways’ site for one-way flights sorted by schedule, US Airways offered a set of fares that did not include additional applicable taxes and fees, or any notice on that page that these additional charges would be required.
The government requires the full fare to either be listed on the first screen that provides fare quotes, or that the existence of additional government-imposed per-passenger charges must be prominently disclosed along with a hyperlink that takes consumers to a page that describes the additional charges.
A US Airways spokesman said the fare problem was “wholly unintentional and the result of an inadvertent programming error,” adding, “US Airways believes that no consumer purchased a ticket without full knowledge of the total price before the entry of a credit card number.” Its full response is also included in the consent order.
Perhaps the most interesting part of this consent order is buried a few pages deep:
For a short period of time, on US Airways’ Internet website, when consumers initiated searches for one-way airfares sorted by schedule, US Airways presented them with a set of fares corresponding to their search parameters that did not include additional taxes and fees.
However, US Airways did not provide consumers any notice on that page that additional taxes and fees would be applicable to these airfares.
By failing to provide any notice of the existence, nature and amount of the taxes and fees applicable to these fares at the first point the fare was disclosed to consumers, US Airways violated 14 CFR 399.84 and engaged in an unfair or deceptive practice and unfair method of competition in violation of 49 U.S.C. § 41712.
Did they say “for a short period of time”? How short? US Airways tells me it was “a few” weeks.
Airlines should be quoting a price that includes everything, including taxes and any required fees, of course. But DOTs rules still allow a carrier to break out the taxes in an initial quote. Maybe that needs to be changed.
(Photo: Willamor Media/Flickr Creative Commons)
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{ 11 comments… read them below or add one }
This is not evidence that the DOT is serious. *I* can authorize payments of $40,000 at my major national corporation and I’m not really a manager.
DOT rules should be changed to require the full fare to be listed on the first screen that provides fare quotes on the airline’s Web site. Airlines should not be permitted to quote a “base fare” which does not include all additional taxes and fees that will be imposed.
A $4 million dollar fine would have gotten the airline’s attention in a meaningful way. Having to pay $40,000 might embarrass it, but is no deterrent to allowing ” inadvertent programming errors” of this nature to occur in the future.
It’s false advertising and drives me nuts. How often do you see like a Lufthansa or British Airways advertisement that says: “Sale! Singapore for $499!*”
* Each way based on one way travel. Taxes and fees not included.
That means your $499 (quite a deal!) trip to Singapore is actually more like $1350.
The fact that some web sites have more prominent asterisks than others is neither here nor there – the whole practice is ridiculous.
@ptkdude: You’re absolutely right, this is a drop in the bucket. Who knows how many hapless souls bought US Airways tickets for a “few weeks” because they looked cheaper on their web site. (Well, they’re not doing so well so maybe not that many…)
But of course those poor software engineers who actually implemented the “inadvertent programming error” got blamed and now have the weight of $40,000 on their shoulders. Nice.
Ditto ptkdude. $40,000 is nothing. If the DOT were serious they would fine in the millions.
$40k is indeed pathetic. If DOT were serious it would make rules with no loopholes, and fine the living daylights out of airlines. I see no reason not to. Apparently, the feds can use some cash these days.
$40,000…meh. Big deal.
This whole issue of undisclosed taxes/fees has been a thorn in the side of my trip planning for years. It makes airfare shopping take forever. You often have to enter info into several screens before you can get to the *actual* full cost of the ticket. And then, if you don’t buy it right then, but go to check out other sites (and click down through THEIR screens to get a real price), the other one changes. I will often line up 10 open browsers and get each site to the final fare so I can do a price comparison. But this takes FOREVER.
Glad that the DOT is doing something. But this is less than a slap on the wrist, and I don’t see that teensy fines like these will make much of a difference. How about a consequence with some actual teeth?
I live in Australia. Here, the Australian Competition and Consumer Comission (ACCC), regulates many aspects of commerce similar to the US’s FTC. They have required that all taxes and fees be included in airline quotes (and just about anything else sold anywhere). It really is quite a simple idea and it’s a bit crazy that the US still doesn’t require this. The taxes and fees are part of the cost of offering that service, and there’s no reason they shouldn’t be part of the up-front price.
I am not generally a fan of massive government regulation, but history has shown that communicating clear prices is something companies won’t do on their own, and appropriate consumer protection seems like a requirement here. What irritates me is why arlines lobby so strongly against this. Don’t they realize that the rules would apply equally to all their competitors, and they will still be able to compete on price in the same way they do now?
Interestingly US Airways will disclose the full fare including any taxes and fees on their European websites, as required by European law.
It can’t be that difficult to have the same IT crew look over the American website to polish it…
Yep, Delta and United do that on the Australian version of their web sites too.
If it was only for a “short period of time”, and if nobody actually bought tickets, then, really, how much of a fine DO they deserve? $40,000 is the price of a cheap programmer who can overlook the code and make sure this doesn’t happen again. :-)
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