The latest round of fuel surcharges imposed on cruise passengers who have already paid for their tickets isn’t just morally wrong. It’s probably illegal, too. And at least one passenger has taken the fight against these surprise extras to a new level that could eventually help thousands of passengers get to cruise at the price they deserve.
I’m talking about Le Moore’s case against Royal Caribbean. On Nov. 16, she received a notice from the cruise line that a cruise she’d booked next spring would cost an additional $140 in “fuel surcharges.” If she didn’t like it, she was told, she could complain by e-mail to cruisecomments@rccl.com.
Now, I should probably mention that Moore is no casual cruiser. She’s a Diamond member of RCCL’s Crown & Anchor Society, its guest loyalty program. She’s used to being treated like a valued customer. So when she received nothing more than a canned response from the cruise line, Moore decided to take his fight public.
“We definitely feel we were ambushed by Royal Caribbean,” she told me.
(RCCL is being extra naughty, because it’s enlisting travel agents in the fight by offering a $12 administrative fee to go after existing reservations with post-January sailings and collect the surcharges.)
Here are the main points of Moore’s letter to RCCL. As I see it, the information in this is grounds for a class-action lawsuit against the cruise line, if not against several cruise lines who recently imposed fuel surcharges. But I’ll let you decide:
Fuel surcharges violate agreement in Florida case. In February 1997, Florida Attorney General Bob Butterworth announced that several cruise lines settled allegations that they misled consumers about cruise costs. Under the agreements, the cruise lines can no longer charge customers any fees in addition to the advertised initial ticket price except those fees actually passed on by the company to a governmental agency.
Extra fees don’t reflect rising costs. Is RCCL really paying more for fuel? An SEC filing made by RCCL less than a month before the cruise line imposed its surcharge suggests the answer is “no.” RCCL declares that if fuel prices for the fourth quarter of 2007 remain at the level of current “at-the-pump” prices including any hedge impacts, fuel expenses for the fourth quarter of 2007 will be $137 million. “We are currently 42% hedged for the fourth quarter of 2007 and estimate that a 10% change in the market price of fuel would result in an $8 million change in fuel costs for the fourth quarter of 2007, after taking into account existing hedges,” it says. In other words, because RCCL has hedged its fuel purchases, it is protected from rising fuel costs.
“We can’t cancel our May cruise, because we are already committed to nonrefundable airfare and hotel arrangements,” Moore says. “This is wrong. This fuel charge should NOT have applied to already booked cruises.”
I agree. There current fuel surcharges were a knee-jerk reaction to higher prices at the pump. They’re wrong and they should be removed for people who have already paid for their cruise, if not scuttled entirely.
Update (11/27 3 p.m.): Apparently, RCCL knows it’s on shaky legal ground — as surely the rest of the cruise industry does. Here’s an interesting exchange from RCCL most recent earnings call report, which Moore as forwarded to me. It has been making the rounds online today:
[D]uring the earnings call, Hakan Ipekci of Merrill Lynch asked, ‘Now that oil or fuel expenses have risen substantially again, what’s your view on a potential fuel surcharge on the ticket prices, passing on the fuel costs to the customers?’ [RCCL] Chief Financial Officer Brian Rice responded: ‘It is something we’ve looked at. There is a little bit of a legal concern before we can pass on a fuel surcharge. As you may recall, years ago, we entered into a compliance with the Attorney General’s office in terms of passing on anything that is non-governmental taxes; anything that was not paid to a government could not be classified as a taxing fee. Also, we view fuel surcharges as something that is more for a shorter term spike in fuel prices. It is something we keep an eye on, but at this time we have no immediate plans to do so.
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.

Elliott is consumer advocate
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