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“The harassment has continued to escalate with each call”

March 20, 2008

And now a truly bizarre story about the darker side of customer service. CheapoAir.com is a site that sells discounted airline tickets, car rentals and hotel rooms. It also has one of the most aggressive collection departments you’ve ever come across. Or, to be more exact, that Melanie Dennis has come across.

Dennis bought “cancel for any reason” insurance on tickets she purchased through CheapoAir. But in order to file her claim, she needed to provide the insurance company with evidence she had called off her trip. So Dennis called CheapoAir to cancel.

Since these were nonrefundable tickets, I didn’t expect to get any money back from CheapoAir. But I was told there would be a refund, although there would also be some penalties. In an e-mail the company said, “the cancellation penalty would be $350 per pax and a maximum refund of $736 or it could be less by some few dollars. The refund will take a maximum of two months from now.”

Coincidentally, Dennis planned to close her credit card account she had used to buy the tickets. She mentioned that to the reservations agent. It’s an important detail.

On the Monday following my cancellation, I started receiving harassing phone calls from CheapoAir representatives in India. It turns out they had tried to bill the cancellation penalties to my now-closed credit card account without my permission.

Then things got even weirder. According to Dennis, CheapoAir doctored an electronic receipt for her original purchase, making it look like she had electronically authorized a charge of $1,736 instead of the actual amount of the tickets, $1,436.

Bottom line: CheapoAir wanted another $300 from Dennis. Wanted it really badly.

“The harassment has continued to escalate with each call,” she told me. And so have their demands.

Now instead of trying to collect an additional $300, they say that we need to pay $700. And they tell us that we would then receive a “refund” check for the tickets that will cover the $700 and the original amount that was reported to be refunded. But of course, none of this is in writing.

I contacted CheapoAir on Dennis’ behalf several times. And I received several different answers, from “we’re looking into it” to “we’re unable to reach the customer.” Which was a little odd, given that Dennis continued to receive phone calls from India every day.

My advice to Dennis was to wait but not to pay CheapoAir anything. Eventually, she received a refund directly from the airline. I can only assume that CheapoAir wanted a cut of that refund, but I don’t have enough information to say that with any certainty.

And the harassing phone calls from India? They continue. But at some point, the collections department at CheapoAir will probably move on.

“I hope you will warn people about Cheapo Air and their illegal practices,” Dennis told me.

Will do. But Dennis’ story raises an even bigger question: Are online travel agencies like CheapoAir billing cancellation fees to customer credit cards without authorization? Are customers paying these fees, whether they get their money back from the airline or not?

Has anyone else come across this problem?

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.

19 comments

  • Chicky

    O.K. FIRST thing Ms. Dennis needs to do is to get out her computer and write a letter, c/o the Collections Department at Cheapo.

    As tempting as it would be to really let them have it, she needs to keep the tone civil and say, “In accordance with the Fair Debt Collection Practices Act, I am hereby requesting your company to cease and desist all attempts to collect this bill via telephone. You may continue to reach me by U.S. Mail. I will consider any further attempt to collect this bill via telephone to be a violation of the Fair Debt Collection Practices Act and will immediately contact my attorney, as well as the Federal Trade Commission. Thank you for your prompt action in this matter.” Sign it, date it and keep 2 copies. Send it registered mail or FedEx, to Cheapo.

    She will probably get a nasty letter from Cheapo, saying they are just trying to collect on a bill, and she’s responsible, blah, blah, blah. However, she can toss the letter and any further letters that arrive. However, the phone calls should stop.

    I would also collect copies of everything concerning this case and send it post-haste to the FTC, anyway. She can look up the relevant information on the Internet for filing a complaint.

    There’s a reason Congress passed the FDCPA and this is one of them.

  • http://waynedayton.tripod.com Wayne Dayton

    This is clearly an unethical and immoral company that North American consumers should be staying clear of. Luckily for astute consumers, a recession is coming down on us now, which should clear the barn stalls of companies like Cheapo that can’t provide a quality product or service, and their untrained staff will be out on the street begging for handouts.

  • Joe Farrell

    I guess that assumes she can find an address for el cheapo . . .

    the FCBCA requires that the demand be ‘mailed’ to the address of the creditor – FedEx ain’t gonna work. As tempting as it is.

  • http://www.ffocus.org Robert Johnson

    CheapOair
    213 West 35th Street
    Suite 1301
    New York, NY 10001

    I also checked some of their fares and there is virtually NO DISCOUNT.

    My advice is the same as chicky with the following. Just flat don’t pay them, not now, not ever. Provide a detailed narrative to the FTC. Also don’t overlook contacting the media or one of the Presidential Campaigns. Offshoring of jobs is sure to be a hot button issue and right now you’re the poster child for why it shouldn’t be done.

  • Jennifer

    Three more steps. The FTC regulates bill collectors who violate the FDCPA. File a complaint at ftc.gov. Your complaint may not receive individual attention but if a number of people file complaints against the debt collector, the FTC may take action.

    Second, collection agencies (even attornies handling collections) are normally required to be licensed in the state in which the DEBTOR resides. Thus, CheapOAir or whomever they contract to do their collections is usually required to be licensed in the state in which Melanie lives. What are the chances CheapO is licensed in Melanie’s state? Slim and none. The State Attorney General or Consumer Advocate generally handles complaints like this and they usually will contact the offending party on your behalf. If Melanie writes to CheapO, I recommend she copy in the Atty General for her state. It works.

    Finally, Melanie must review her credit report in the next 3 months because this debt will likely appear. Then she must dispute the item with the credit reporting agency immediately. If this happens, file another complaint with the FTC under the Fair Credit Reporting Act. If CheapO won’t remove the item from her credit report, it’s time to find an attorney who practices consumer law. They usually take the case on a contingent fee. The fines mount pretty high.

  • Jennifer

    Sorry, should be spelled attorneys. My brain froze.

  • Joe Farrell

    Mr. Johnson, you make the obvious mistake many people make in assuming that the address which they give you for travel insurance contact is the address of the company where the officers are located. If you send the demand to the wrong address they are not obligated to follow the law.

    Thats why people use lawyers – because we are trained to read ALL of the statute AND the regulations of the FTC or whatever agency may be involved and to be certain the interaction comports with the requirements of the law, not someone’s best guess. . . .

    That may very well be the same address, but somehow, I doubt it.

  • http://www.ffocus.org Robert Johnson

    Mr Farrell I’ve gone Pro Se on several matters including a divorce. Once you have an address you can do many things. Like find a phone number for instance.

    All it takes is an internet connection and some legwork and one can save thousands in legal fees. I’ve become a very skilled advocate for myself and I don’t bully well. I provided an address I found in under two minutes. If it was my case I’d have done more.

    Somehow I feel like the villian here because I didn’t suggest a fee generating lawyer. It’s way way long past time for people to stand up for THEMSELVES.

    Over the last eight years as a frequent traveler I’ve gotten thousands in refunds, vouchers by effectively raising hell. Anyone can I’m not that smart.

  • jennifer

    Mr. Johnson, wow, you get defensive very easily. Joe was not accusing you of anything. However, you very easily turned on him. I, for one, get very tired of constantly being attacked for being an attorney and that is just what you did.

    I gave numerous suggestions above to the original letter writer on trying to resolve this herself. Only after those suggestions fail, did I suggest an attorney when CheapO escalates the matter. Not everyone wants to spend their lives chasing a few hundred dollars when an attorney can handle the matter AS THEY ARE TRAINED TO DO.

    I applaud you for what you say you have accomplished. Whether an attorney could have done more for you, probably, but whatever makes you happy. I spent 3 1/2 years doing client counseling trying to help people avoid having to retain attorneys, if at all possible, by giving them legal advice to follow themselves. Here is the clincher, it is not always possible.

    However, Joe correctly pointed out the hazard of an untrained person giving potentially wrong information. Sorry that fact bent you so out of shape but I’m sure Ms. Dennis would appreciate the correct information.

    So, back to the actual topic at hand, Ms. Dennis should complain effectively following the steps outlined above and then, if those steps have failed, may wish to retain an attorney who specializes in this area.

  • http://www.ffocus.org Robert Johnson

    Jennifer,

    I had the Law School Admission Service for an account for many many years. So perhaps I’ve earned my opinion.

    I also sell copiers which is an industry NOT for the faint of heart. Being called a “SLeazey Copier Salesman” earns a smile. When you choose a profession with a spotty reputation then you’d best have a thick skin.

    I find the idea that you need an attorney to take a crap insane. God game me a brain and I use it. Right now I’m batting a thousand with various consumer agencies.

    But what I’m really struggling with is my Girlfriends 13 year old son. GRRRRRR! Trashing Lawyers and fighting with travel companies is a walk in the park

  • Gena

    I find CheapoAir’s practices appalling! I wonder how many people have been bullied into paying cancellation fees or have had unauthorized charges made to credit cards? I commend Ms. Dennis for taking them to task on this. Please let us know how this turns out.

  • Melanie Dennis

    I have to tell you that I really appreciate the advice provided. I will take the steps outlined, and if I continue to receive the phone calls, I will then consult an attorney. I’d LOVE for Cheapo Air to have to pay some fines for this one.

    Thanks to everyone who posted. Keep posting, as it will draw more attention to the sleazy tactics they are taking to rip people off.

  • http://notravelmlms.blogspot.com John F

    For some reason, just doing business with a company called Cheapo Air might raise a red flag for me. What is next? WeWillGetYouThereSometime–Maybe.com?

  • Bob

    If she is a resident of Texas, the Texas (and some other states) laws on debt collection are stronger and also apply to the original creditor (unlike the Fed law). Each violation is $1,000 and stand alone whether or not the debt is owed.

    With the Cease and Desist, include a request for validation (not verification). Any further collection attempts without validation, file in JP court.

    Search the web, plenty of places to assist pro bono.

  • RebeccaJay

    Right on John F. And that wewillgetyoutheresometimemaybe.com made me laugh.

    CheapoAir’s name alone is enough of a warning for me.

  • http://www.ffocus.org Robert Johnson

    I did some comparison shopping and CheapoAir isn’t all that cheap. I was able to find equal deals with relative ease and a few cheapo deals to boot.

    There is no free lunch in travel or in life. You get what you pay for and/or what you negotiate.

    People have to realize that when you know the price of everything your often forget the value of anything.

    Companies like Cheap work on razor thin profit margins and throw up numerous roadblocks in the Customer Service process designed to frustrate the average consumer into just giving up and “going away”. The internet is a powerful tool for leveling the playing field. When consumers wake up and see how easy it truly is to raise hell and do so then things will change. As it is now we are all calculations on a spreadsheet. When the cost of settling court claims and negative media exposure excedes the amount budgeted for “The Squeaky Wheel” then change will occur, probably in the form of even harsher rules and contracts at first followed by improved customer service once they see people won’t “Go Away” quietly.

    Bottom Line is:

    Know the rules
    Know the contract
    stand your ground
    Don’t give up with the first “NO” you get.

    Oft times they will agree with you to get you to go away which is fine YOU WON.

  • Rick Damiani

    I see lots of folks talking about the debt collection aspect. Where is the outrage over being charged an additional fee to miss the flight? I mean, how bizzare is it that *not* taking a trip costs more than taking one?

  • http://cheapoair.com george_blue

    Cheapoair.com is the worst, they use a bait and switch tactic to rip people off then charge fifty dollars in cancellation fees after they changed the dates for your travel. Run away from cheapoair.com fast.

    They need to be shut down.

  • RAQUEL

    Let me just say this … what you see is NOT what you get with CheapOair. This company bait you with lower prices, then switch after you are booked. I booked with them on a rate I was pretty comfortable paying. This morning, I get a phone call informing me that that rate has expired, and therefore, I have to be charged with the new rate?! I I explained to them that that is not honoring their advertised rate. I also told the supervisor that it is actually their policy that informs the consumer that CheapOair will pay the difference in the change of rate of $25. My words unfortunately landed on deaf ears. I was placed on hold for an half and hour and lied to repeatedly after that. I told her that they are not following advertisement laws or upholding their agreement. The only response I received from the woman with a thick Indian ascent was “I’m sorry”. Trust me, never again will I used them.

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