Read this before you file a chargeback on a delayed flight

When Milton Dortch and his wife planned their trip from Atlanta to New York in December 2015, Dortch booked their flights on Delta Air Lines, using his American Express SkyMiles credit card. On their day of travel a series of violent thunderstorms caused delays in the southeastern U.S., and Dortch arrived at his destination 10 hours late.

What Dortch did next will surprise you. The outcome of his story should serve as a warning about the need to know both your rights and the rights of the company with whom you choose to do business.

Dortch signed up for Delta’s electronic notifications of flight delays “years ago,” and says that the service had always notified him of flight delays. The service didn’t notify him anything was wrong on that day, so he and his wife made their way to the airport.

I’ll let Dortch tell us what happened next.

We got to the airport, checked our luggage and again we inquired as to the flight being on time considering the weather and were told, once again, everything was on-time. We got to the gate and the board showed on-time and we were told everything was on-time despite the obvious weather conditions.

Once the departure time had passed we were finally told the flight was delayed due to weather. We then waited in the airport for 8+ hours and during this entire ordeal neither of us were never [sic] once contacted by Delta via our cell phones: neither by ext nor email.

Ten hours after the original arrival time on their tickets, Dortch and his wife finally arrived in New York. They stayed for the original duration of the trip and used the return portion of their tickets to get back to Atlanta three days later. Dortch did not report to us that there was any delay in this flight.

Fifteen days after his return flight landed in Atlanta, Dortch filed a credit card dispute with American Express for the full cost of both his and his wife’s tickets ($318 each) plus an additional $45 per ticket, which seems to be for seat assignments.

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In case you missed it, Dortch asked for a full refund of his round trip tickets — not for half the cost, given that only his outbound flight was delayed.

When filing a dispute on a credit card, companies require that you provide a reason for your claim that you should be refunded. Dortch’s complaint was filed under the option “Other (Damaged, Dissatisfied with Service, Paid by Other Means),” and asserted that he was dissatisfied with Delta’s failure both to advise him of the delay and to deliver him to New York on time.

Here’s the first shock of this story: American Express sided with Dortch and refunded his money.

But before you Google the website for the last airline that delayed your flight, there’s more to the story. According to Dortch, Delta never responded to the dispute from American Express.

A credit card company typically gives a company 30 days to respond. In this case American Express seems to have given Delta a bit more time, but the complaint was resolved within 90 days after Dortch’s original flight.

So why are we talking about this case more than 15 months after the delay that caused this headache in the first place? That’s the second shock of this story: Delta hired a collection agency to go after Dortch in January of this year.

Thanks to the Fair Credit Billing Act, consumers have the right to dispute a charge that they feel to be some kind of billing error, including:

  • unauthorized charges
  • charges with the wrong date or amount
  • math errors
  • failure to post payments and credits
  • failure to send bills to your current address (when the company has it at least 20 days before the end of the billing period)
  • charges for which you requested an explanation or proof of purchase
  • charges for goods and services you didn’t accept or that weren’t delivered as agreed

But the intent of the the Fair Credit Billing Act is to help even the playing field for consumers, not to allow consumers to profit from its protection, getting both the product and the money, sometimes known as “friendly fraud.”

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The reality is that Dortch and his wife used the flights they purchased — both to New York and back to Atlanta. The delay of the outbound flight was not within Delta’s control. As noted in its Conditions of Carriage:

Delta shall have no liability if the flight cancellation, diversion or delay was due to force majeure. As used in this rule, “force majeure” means actual, threatened or reported: (1) Weather conditions or acts of God (2) Riots, civil unrest, embargoes, war, hostilities, or unsettled international conditions (3) Strikes, work stoppages, slowdowns, lockout, or any other labor-related dispute (4) Government regulation, demand, directive or requirement (5) Shortages of labor, fuel, or facilities (6) Any other condition beyond Delta’s control or any fact not reasonably foreseen by Delta

I fly nearly 100,000 miles per year, so while I understand the frustration of flight delays, holding an airline responsible for weather issues is unreasonable. In fact, I am rather fond of a saying I once heard a pilot use, “It’s better to be on the ground wishing you were in the air than in the air wishing you were on the ground.”

While Dortch won his initial battle and received a favorable ruling from AmEx and a refund for the flights he took, the war came back to him in the form of the collection agency demanding payment in full. He appealed both to his credit card company and to Delta for help, claiming that the chargeback should be the final word and he should owe nothing to Delta. The airline refused to intervene, unsurprisingly, and American Express told Dortch it had already ruled on this charge, refunded the money, and closed the case.

I disagree with the decision that American Express initially made: Dortch took the flights, the airline got him where he was going, and the delay was out of the airline’s control. But the decision was made in his favor, so I was surprised to learn that a collection agency could be hired to collect the money anyway.

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In fact, the Fair Credit Reporting Act doesn’t address the responsibilities of a company to respond to a chargeback claim, nor does it prohibit a company from hiring a collection agency to collect money directly from the consumer after a chargeback is issued. A company’s ability to return to a customer for payment after a credit card company has ruled in the consumer’s favor weakens consumer protections the Act was meant to address.

Dortch also reported the collection agency and Delta Air Lines to the Better Business Bureau and the Attorney General of the State of Georgia. The Better Business Bureau referred the matter to Delta, which had already refused to help — and refused again. The Georgia Attorney General’s office also forwarded the complaint to Delta Air Lines. The Aviation Consumer Protection Division received a copy of the complaint from the Georgia Attorney General’s office, as well.

The list of things done wrong in this case is a long one: Dortch should never have filed a chargeback; Delta should have responded to the initial inquiry from American Express; Delta should not have hired a collection agency when the decision against it was its own fault; American Express and Delta, both at fault for the original chargeback decision, should have been more helpful with the collection agency.

Without assistance from any of the companies or agencies he had contacted, Dortch reached out to us. Had he contacted the list of executives we list on our site for Delta Air Lines when the problem initially happened, he might have had a different (and quicker) outcome. And we might have been more inclined to help if he weren’t asking for a refund on flights he actually took.

Our advocates told Dortch this is not the kind of case we would mediate. He finally negotiated a settlement with the collection agency for approximately 75 percent of the value of Delta’s claim. In the end, Dortch got his flights at a discounted price — but at what cost?

Michelle Bell

Michelle worked in the travel and hospitality industry for almost two decades. Born in Germany, she has lived in 15 states and two foreign countries, and traveled to more than 35 countries. After living and working in Southeast Asia for several years, she now resides in New Orleans.

  • sirwired

    I could totally support a rule that if a consumer wins a credit card dispute, the merchant should be unable to chase after you afterwards. If they don’t like the fact they lost, they can take it up with their bank.

    But yes, this was a bad dispute. Credit cards don’t make it any easier when they don’t explain what is supposed to be “disputable” under “other”. Credit card disputes are not a legally-mandated unconditional money-back guarantee.

  • Inquirer1111

    Would it affected his credit score to have a collection agency involved? Or not, because it wasn’t aloan?

  • MarkKelling

    Good question. I would believe that anytime a collection agency is involved it negatively impacts your credit score.

  • Alan Gore

    A ten-hour delay is irksome enough that if LW had asked at the airport he might have gotten a voucher out of it, but trying to get his entire trip refunded is pure overreach.

  • Rebecca

    There’s a problem with that. I’m not certain about Amex, but I do know (at least when I worked on these) that for Visa/MC, if the credit card is manually entered (the term is actually MOTO – a throwback to before the internet: mail order telephone order), the merchant agreement allows automatic chargeback rights for 60 days. Which means the bank is out no money so the consumer generally automatically wins. Some larger merchants especially don’t respond simply because it’s a waste of overhead to do so. It’s a numbers game.

    In practicality, this means sometimes a merchant will go after the consumer. Additionally, there are certainly times when a consumer wins a dispute but is still legally liable. Again, the merchants recourse is to attempt to civilly collect the funds.

    It isn’t a perfect system. But the idea behind it is that the consumer does have recourse as well. The debt can be disputed. A consumer can prevail in a civil lawsuit to collect the funds.

  • Rebecca

    Yes. Just like a medical bill going to collections would. This debt has technically been delinquent for longer than 120 days, as it’s been over a year.

  • John Baker

    Chargebacks don’t rule on the validity of the dispute or underlying agreement only on if the merchant met the terms under the credit card’s processing terms.

    If you have an issue with the terms of your agreement with a merchant, the place to go is a court.

  • sirwired

    Yes, if a merchant hasn’t filed a charge correctly, or their agreement says they automatically lose (or win) certain kinds of disputes, then that’s the end of it. But certainly further investigation does take place for many kinds of disputes before they are ruled on.

  • sirwired

    Depends. Many collection agencies do NOT file with the credit bureaus right away. If they can get you to pay up straight off, there’s no need to.

    I had a debt go to collections once (medical provider sent the bill to the wrong address), and it didn’t hit my report, even though it was a year old at the time.

  • sirwired

    I think the “automatic chargeback” depends on a lot of things. For instance I know the merchant always loses “I never made that charge” disputes unless they took certain verification steps beforehand. But “I’m not happy” disputes? It shouldn’t make any difference if that’s a manual or swipe transaction.

    And if the merchant is too lazy to respond to disputes, I still don’t think it’s right for them to change their mind later on and chase after the consumer.

  • James

    Some larger merchants especially don’t respond simply because it’s a waste of overhead to do so. It’s a numbers game.

    But what doesn’t make sense is not responding to the dispute for reasons of cost, then employing a collection agency.

    These collection agncies will charge a significant fraction of the debt — the company sells the debt to the agency. When I looked into a collection after a civil suit, I saw I’d get maybe 2% of the judgement by selling the debt. I suspect the airline may get more — but maybe only 50% at best. Less the organization to sell the debt — is it really less costly to go to collections than it is to challenge the chargeback? I seriously doubt it.

  • KennyG

    I am wondering if what you are saying is that the paper pushers at American Express [or whatever banks credit card you are disputing] have the force of a court of law. The credit card is simply a means of convenience for payment on a contract between the passenger and the airline. It in no way absolves the purchaser of services from the obligations they take on once they enter into a contract with the provider of those services. If that is the argument being made, then why is it not the same in the reverse, if this flyers chargeback request to AMEX was turned down by AMEX it should be final, end of story, do not pass go, do not collect $200, he should no longer have access to a court of law for a resolution, and I doubt very few if anyone on this board would agree with that.

  • Randy Culpepper

    Good for Delta on this.

    Also, if this debt is reported as “settled”, his credit score just took a big dip.

  • sirwired

    A credit card IS more than simply a means of payment; that’s why we have rules around them that do not apply to, say, checks. And, certainly, if a merchant can’t be arsed to respond to a dispute they get notified about from their bank, I don’t see why they should be able go directly after the consumer on their own schedule later.

    And you have to consider the vast power imbalance involved. Let’s say somebody steals my credit card number; the bank agrees and cancels those outstanding charges. Are you saying it should be fine if the merchants chase after me, personally, for payment, maybe betting I won’t go through all the trouble of a lawsuit to get the collection agency off my back? Oh hoping that if I am sued for payment, I won’t have time to show up for court to plead my case? (Which, without hiring (and paying for) a lawyer yourself, is likely to be lost.)

    Lastly, there are things that can go wrong that are (correctly) outside the dispute process, but not necessarily outside the legal process. A lost dispute should not preclude legal action by the consumer in those instances. But a dispute that has been won (either by default), or by adjudication) should be the last word.

  • Dutchess

    I think Dortch is lucky that Delta didn’t strip him of his FF account and ban him from flying in the future. Dortch’s CC dispute was in bad faith and should never have been resolved in his favor.

  • KennyG

    Although I am not an expert on these matters, if your credit card is stolen and is used at a merchant, the liability for the charges incurred do not fall back onto the merchant, they are “eaten” by the issuing bank [and it insurance policies]. You may consider a clerk at a desk in American Express capable of “adjudication” of a legal dispute, but I don’t believe any actual court of law would support that except on a case by case basis as evidence is presented. If the agreement between the consumer and the merchant requires either to abide by a clerk at a banks decision [or an arbitrator, or my 3rd cousins eldest daughter], then I agree with you, the merchant has contractually agreed to that as a final decision, but simply the fact that a merchant doesn’t respond to a 3rd party rendering a non-legal opinion about the validity of a debt seems a bit beyond fair and equitable, even in the admittedly vast power imbalance you describe.

  • sirwired

    I know that the outcome of a credit card dispute currently isn’t final or legally binding, hence me saying, in my initial comment, that I could support such a law making it so.

    And who “eats” the charges for a stolen card depends on a very large matrix of circumstances that vary depending on charge type, merchant type, and authentication measures. Sometimes the merchant eats it, even if they’ve followed their agreement, sometimes the issuing bank eats it, and sometimes it’s the merchant bank.

    “but simply the fact that a merchant doesn’t respond to a 3rd party rendering a non-legal opinion about the validity of a debt seems a bit beyond fair and equitable,”

    A credit card is not just a random, unrelated, 3rd party, (like the BBB) it’s an active relationship with both the consumer and the merchant. (And in the case of AmEx, it’s all one company, and not a string of them)

  • Bill___A

    Maybe Delta should ban people in this situation.

  • Altosk

    Yeah, this is one travel who reaped what he sowed. I’d love to see Delta ban him or something for this act.

  • Michael__K

    For the missing Flight Status Notifications, the passenger should submit a complaint to the Dept of Transportation and cite 14 CFR 259.8

    The DOT can’t force an airline to compensate a particular passenger, but if enough passengers complain when flight status notifications are missing in action then eventually the DOT will be compelled to do something about it and take enforcement action (e.g. fines, consent orders).

  • Lindabator

    And AMEX is notorious for paying on bad claims – makes it harder for everyone!

  • Lindabator

    but no REAL way to know if they even got the notice from AMEX – its not like they call – they send via payments and easy system to lose one

  • Lindabator

    but they are notorious for just submitting these chargebacks electronically and NO follow up — Delta may not even have received the chargeback in the first place!

  • Lindabator

    but he expected a ticket UNDER AIRPORT CONTROL would receive notices – well, duh – he is at the airport and can clearly see delays as they occur

  • BubbaJoe123

    That’s not an unreasonable expectation. I always get notices on flight status changes, even, in some cases, when I’m actually already on the plane.

  • Michael__K

    14 CFR 259.8(a) makes no such distinction.

    Would you be okay with disregarding an airline’s contract when it seems unnecessarily inflexible to the passenger?

    § 259.8 Notify passengers of known delays, cancellations, and diversions.
    (a) Each covered carrier for its scheduled flights to, from or within the U.S. must promptly provide to passengers who are ticketed or hold reservations, and to the public, information about a change in the status of a flight within 30 minutes after the carrier becomes aware of such a change in the status of a flight. A change in the status of a flight means, at a minimum, a cancellation, diversion or delay of 30 minutes or more in the planned operation of a flight that occurs within seven calendar days of the scheduled date of the planned operation. The flight status information must at a minimum be provided in the boarding gate area for the flight at a U.S. airport, on the carrier’s website, and via the carrier’s telephone reservation system upon inquiry by any person.

    (1) With respect to any U.S. air carrier or foreign air carrier that permits passengers and other interested persons to subscribe to flight status notification services, the carrier must deliver such notification to such subscribers, by whatever means the carrier offers that the subscriber chooses.

    (2) The U.S. carrier or foreign air carrier shall incorporate such notification service commitment into its Customer Service Plan as specified in section 259.5 of this chapter.

  • MarkKelling

    I get update messages from United up until the plane lands. Sometimes those are more accurate and informative than the information the gate and ticketing agents are willing to share. Southwest is also relatively good at continuing updates until the plane departs as well.

  • cscasi

    May have made Delta mad because he did use the tickets round trip and really, Delta is not responsible when weather delays the flight(s). So, perhaps some eager bean counter at Delta just decided to try to get some of the money back that it should not have had to lose in the first case; even though it did not respond to the bank within the normal allotted time frame. Who knows? Just a thought.

  • Rebecca

    The collection agency is simply purchasing the debt, in many cases. And you’d think not, but I can assure you someone looked at the numbers. The success rate for the merchant on a chargeback where the bank has automatic chargeback rights is factored into this equation too. For a few hundred dollars, it’s not cost effective, because it will almost certainly have to go through twice.

  • Kristiana Lee

    As a small business owner, the idea of having to fight a big bank to get part of my salary scares me. There has to be a way for businesses to fight bad disputes, hopefully one that doesn’t involve lawyers. I have a wonderful business attorney but he charges $350 an hour so it’s less expensive for me to write off the debts than to involve him.

    Here’s a case from the forums. Alex bought 5 nonrefundable international plane tickets from Cheapo and filed a charge back when he found a better deal. American Express sided with him and left Cheapo holding the bag. I don’t think Cheapo should have to take a multi-thousand dollar loss because Alex didn’t research before hitting the “buy” button. Cheapo had no other option but to send him to collections to avoid taking a big financial hit.

  • Kristiana Lee

    But what happens when the credit card company sides with the consumer when the merchant clearly honored their side of the deal? Check out this case from the forums I already summarized it earlier in the comments. Consumers need protection from crappy businesses but sometimes businesses also need protection from people who try to take advantage of them.

  • sirwired

    As a consumer, the idea of having to fight off a huge collection agency (which may be hired by a business of any size), even if I have a legit dispute, in order to hold on to my bank account scares ME.

    If the bank sides with the consumer in a way that does not adhere to their agreement with the merchant, I think the correct party to pursue is the bank, even if that’s a painful process.

  • michael anthony

    If a consumer is unhappy with a credit card dispute, I do believe they have options such as court, to recoup. Thus, why shouldn’t the merchant have the same right? With the charge back, the carrier was out money, no different than unpaid bill. If you’re being upfront and honest with a chargeback request, then I wouldn’t worry.

    SomethING is missing here and I’m not sure what. AMEX is Deltas preferred card for earning miles and such, so you have to wonder why AMEX ruled in is favor. When he so clearly received all services in which he was entitled! Perhaps Delta was not notified or perhaps the OPs complaint was not accurate. Hard to say, but I doubt Delta would send you to collections, unless they had a legal right to do so.

  • Barry

    Great summary Michelle. The only things Delta did wrong, in my opinion, were to delay in collecting and then use the collection agency. The customer had no right to a complete refund. People doing things like this make it hard for the rest of us to get refunds we are genuinely entitled to.

  • Kristiana Lee

    I agree with you when the charge back is legit. My only concern is in cases like the one presented in this blog post. Or what about the Cheapo case I cited? What other recourse is there for the business? Especially if it’s a small business.

  • joycexyz

    If Delta never responded (according to Dortch), they lost by default. They shouldn’t be able to go after him because of their error. AmEx should help him resolve this.

  • Annie M

    Karma works in funny ways.

  • Kristiana Lee

    It’s completely not feasible but it’d be great if these disputes could be handled by an impartial third party. What happened to you sucks just like what happened to Delta sucked. I just think the bank isn’t impartial enough to be allowed final say in these disputes. If they know it’ll be expensive for a merchant to sue them, why not side with the consumer all the time? The consumers get what they want. The bank isn’t out money. The merchant will probably write off the debt because it’s too expensive to sue.

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