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Oh dear, did we forget to mention that $500 change fee?

August 20, 2010

Question: My wife and I recently flew from Vancouver to Ecuador on Continental Airlines, then to Lima on LAN Chile. After booking the trip through our travel agent of about 20 years, we asked if we could change the LAN leg from Quito to Lima by two days without penalty.

Our travel agent called Continental and was told that the LAN leg could be changed without any change fee because we weren’t changing any Continental legs. He asked if they were certain that there would be no change fee and was assured that was the policy. He had another follow-up discussion with a Continental agent and was given the same information. We changed the flight.

Two months after our flight, our agent was advised that we should have been charged a change fee of $500 and an electronic fee transaction was applied to the travel agent’s bank account. Our travel agency has challenged the payment with Continental without success.

Today I called Continental and spoke to an international ticket agent. She said my agent had no recourse, and should have known the rules. When I asked her how Continental expects travel agents to know the rules, but not their own agents, I didn’t get an answer. I asked to speak to a supervisor about my complaint, but was told “there is no point as the booking is no longer in our computer system.”

If Continental had told us that there would be a $500 change fee when we first enquired about the change we would not have changed our flight to Lima. It is very high-handed of Continental to conduct business in this manner. We would greatly appreciate anything you might do to help. — Brian Petersmeyer, Vancouver, Canada

Answer: Continental shouldn’t have charged your travel agent $500 after your flight. And even if it had, you shouldn’t have been dragged into it.


Let’s take these issues one at a time. The charge from Continental to your agent is referred to as a debit memo. Airlines send them to travel agents when they’ve booked a ticket incorrectly (or, as they often like to say, illegally). The problem with these memos is that they’re arbitrary and sometimes unreasonable. If an agency doesn’t pay the fine, it could lose its ability to write an airline ticket.

You’re correct in your assessment of the airline’s position. Airlines (not just Continental) expect agents to know their rules, and when they violate them, air carriers are quick to demand that they pay whatever penalty they see fit. I would have no problem with this, as long as airlines were clear about their rules. In your case, it appears Continental’s employees misinformed your agent.

Should you have forked over $500? No. You used a travel agent and paid a booking fee because of his expertise. Also, you paid your travel agent for the tickets, not the airline. I can certainly understand why an agent might be tempted to pass along a debit memo to a client, but in almost every circumstance, I don’t think the customer is responsible for a fare difference or penalty. It’s your agent’s problem.

You might have cleared this up by sending a brief, polite email to Continental. I list the names of customer service executives on the On Your Side wiki (http://onyoursi.de/wiki/). A written query might have initiated a more thorough investigation, which might have revealed that the agents to whom you and your agent spoke gave you incorrect information about the change fee. Most airlines record every conversation in their call centers, and can listen to what an agent said and then make a determination.

I contacted Continental on behalf of you and your travel agent. Your agent contacted you shortly after that, saying that Continental had reversed the charges.

(Photo: martin toy/Flickr Creative Commons)

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.

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19 comments

  • http://www.singleparenttravel.net John Frenaye

    Chris–

    I am not sure how it works for Canada, but in the US, the client is indeed charged by the airline and not the agent. The agent may process a separate charge for the ticketing fee–and we are not even sure if one was assessed–if the agent sold the rest of their trip and earned commission, they may have waived a fee.

    In the US, the airlines run a cartel not too dissimilar than the mafia. They can come in at any time (via ARC) and take money out of your bank account for (as you said) a rule that they either changed or arbitrarily enforce. There used to be a time when the airlines actually put money IN the banks too!

    And as for passing along the debits to clients, that is an iffy situation. If it was a clear cut case of the agent was wrong, by all means it it the agency responsibility to eat it. This was a grey area. But take a client who knows some of the rules (like most business travelers), quite possibly they will use hidden city or back to back tickets and not realize that the airlines now have the software to detect it. Who get’s blamed? The agency who sold the ticket–and usually dinged for the full walk up fare of the routing they actually traveled. The agency has no idea the client is doing that, and in that case, it is perfectly acceptable to pass it back to the client.

  • Ed

    “Your agent contacted you shortly after that, saying that Continental had reversed the charges.”

    Did they really? Or did the agent just eat the cost for the sake of closure?

  • Josh

    Wow. It wasn’t clear from the (edited?) version whether they paid the travel agent or not, but I agree that they shouldn’t have. It’s complicated by the fact that they’ve done business for 20 years and are presumably friendly, but I think my answer to being called with this sort of debit memo would be “Sorry to hear that; good luck!”

    This is actually a disadvantage of a travel agent (or rather a disadvantage agencies have vs direct consumers of the airline). By contractual agreement the airline can debit the agency without recourse for a number of things, but generally credit card and consumer protection laws would prevent them from, say, charging a customer’s card months later (and reversing it would be much easier).

    This is true for some of the airline’s made-up “violations”, like back-to-back ticketing; if done directly with the airline nobody’s shown that they can back-bill the customer, where they can and do issue debit memos if booked via an agency.

  • MVFlyer

    Sounds like Continental has been hiring their agents from the rental car industry…let’s hit ‘em up for charges way after the fact, as long as we’ve got their credit card number.

  • Sarah

    @John F:
    What’s a “hidden city”?

  • Jason

    Continental charged me additional change fee ($25) on top of the regular change fee ($150), because my original ticket was booked through a travel agent. Only $150 fee was disclosed in the fare rules.

  • Edmond

    It sounds like a difficult proposition for a travel agent, especially if it was the airline’s mistake or the TA’s fault. You book a ticket from an airline that you are somewhat beholden to for your client, but the airlines reneges with an additional charge/penalty. I can see for the TA that it would be tempting to even charge a long time customer, because the airline is your long time bread and butter. If you upset the airline, they can take away your privileges, but if you pass along the cost to the client, the client can challenge the airline in a much more direct manner without any real retribution by the airline.

  • MeanMeosh

    @ Sarah – “hidden city” ticketing is probably best illustrated by an example.

    Let’s say you want to go from LA to Denver. A direct flight from LAX to DEN lists for $362, roundtrip. But a roundtrip from LAX to Albuquerque, with a stop in Denver, costs $219. So, you book the ticket LAX-ABQ-LAX, but when you get to Denver, you simply walk out of the airport and throw away the leg to ABQ. Likewise, instead of getting on the plane at ABQ, you wait until DEN and board only the connecting flight back to LAX. Hence, the moniker “hidden city” – your intent all along is to get off at an intermediate city, instead of the destination city for which you purchased the ticket.

    The airlines don’t like this, of course, since in their view, you’ve cheated them out of $143 by booking a bogus ticket (since your intention all along was to fly to Denver, not Albuquerque). So now, when you walk out of the airport in Denver, the entire remainder of your itinerary gets canceled. Even if you luck out there, when you don’t check in for your first leg in Albuquerque on your return, your entire return gets canceled, so you’re out of luck when you try to board in Denver.

  • Joe Farrell

    They called Continental and Continental said ‘it’ had no change fee. . . . and they didn’t – did anyone think that LAN CHILE has the change fee and since Continental ISSUED the original ticket they came back to Continental and wanted to be paid . . Lan Chile did not authorize CO to speak for it – the person who said there would be no fee simply was a script reader with zero clue as to Lan Chile’s tariff.

    That being said – well – CO needs to eat the fee becasue what the SHOULD have said was: “There will be no fee to change the continental segment – you need to contact Lan Chile to see if they have a change fee.”

    You can’t actually expect someone in th reservations department in Mumbai to know what Lan Chiles tariff says, what CO’s tariff says and then reconcile the two? Can you?

  • http://www.destinationiran.com Rahman Mehraby @ Destination Iran

    It really hurts and unlike the advertisements such corporates publish, it’s not something that you enjoy and remember for the rest of your life. You may enjoy it first, but the HIDDEN FEES will remain as the bitter part of it. I’m sorry for them.

    Rahman Mehraby
    Destination Iran

  • MeanMeosh

    @ Joe Farrell – your prejudice towards foreign call center employees is well documented. However, you might actually want to get some facts before blaming a “script reader” as you like to call them. Not all airlines use outsourced call centers – and even for those that do, not every call is handled by one. And I’ve been given equally rotten service by AA’s phone reps located in Dallas as a “script reader” in Mumbai. My point – you don’t know who Mr. Petersmeyer talked to, so attacking an Indian call center employee is unwarranted. And, I’ve been holding my tongue on this for quite some time, but those “script readers” are people, too. You might try treating them like human beings, instead of instantly dismissing them as a bunch of incompetent rubes (some are, yes, but not all).

    Back to the issue at hand – you’re probably right in that whoever the travel agent talked to at CO didn’t bother checking on LAN’s cancellation fee. That makes it CO’s problem, and if I had to speculate, when CO reviewed the call and computer logs, they found that improper promises were made/the follow-up with LAN wasn’t done properly, so they caved and issued the refund. The agent should have been taking it up with them, though, not Mr. Petersmeyer.

  • Jennifer Hanuschak

    I’m a bit confused, perhaps, but where did it say in Mr. Petersmeyer’s question that he had to reimburse his travel agent for the $500 debit memo? I certainly hope that was not the case! I believe that Continental, and only Continental, is to blame for this! The travel agent, who must be a good one to have earned twenty years of this client’s business, should not be held responsible and should have this debit memo stricken from his record immediately!

  • Carver

    @Meanmosh

    There are some very good reasons to be less than enthused about dealing with outsourced call centers. True, someone may get bad service from a call center located anywhere. However, call centers in India seem to be less proactive and less able to deal with any cicumstances except by following a script.

  • Scott

    RE: outsourced call centers

    1) While there are competent and incompetent (and everything in between) people everywhere and in every field, there is an EXTREME higher rate of mistakes and general incompetence from the overseas call centers than in country.

    2) Those call centers are coming at the direct expense of jobs for your neighbors and people in your communities. Perhaps you would like your job “shifted” overseas?

  • Carver

    @Scott

    Its not that the overseas folks are incomptent, its that we have to battle the twin issues of different cultures and expectations and sometimes language.

    Also, the reality of jobs is that to remain competitive, a company has to adapt and cut costs. Some states have been hit hard by the loss of the manufacturing base in the US. Similarly, in the 80s people moaned about losing jobs to computers. Yet computers have created innumerable jobs. iphone anyone?

    Even today, many of the travel agents in this forum are trying to staunch the financial bleeding, having convinced themselves, if no one else, that internet bookings are bad; even routine “A” to “B” domestic bookings require a brick and mortar travel agent, even for a sophisticated traveler.

  • Steve

    I guess I don’t understand why the customer contacted Chris in the first place, unless it was as a favor to the travel agent. It seems like whether or not Continental is in the wrong here, the fee should never have been passed along to the customer. (And it’s not clear if it ever was, for that matter).

    It seems to me that the sole purpose of using a travel agent is to be able to get your questions answered directly rather than having to contact the airlines, etc, on your own. Once the agent told them there would not be a change fee, the customer should absolutely not have to pay any change fees. Again, I’m not taking Continental’s side here, necessarily, but the one thing that seems crystal clear is that the traveler shouldn’t be responsible for the change fee.

  • David Z

    Even today, many of the travel agents in this forum are trying to staunch the financial bleeding, having convinced themselves, if no one else, that internet bookings are bad

    If anything, the ‘Net has essentially rendered travel agents (like me) moot in terms of booking trips for people; that some still pay travel agents if they feel they’re “unable” to prepare flights, hotel rooms, etc. or work out travel problems on their own.

  • David Z

    Just an add-on since I forgot to include this on my previous comment: I guess not all travel agents really know this, but supposedly we follow the “most restrictive rule” when changing flights for trips involving more than one carrier.

    Let’s say a travel agent booked an itinerary or trip from Los Angeles (LAX) to Las Vegas (LAS) to Luxembourg (LUX). The flight from LAX to LAS is via American Airlines (AA), then LAS to LUX is via Malev Hungarian Air (MA).

    The trip’s “fare rules” or rules of the ticket has two sets: one from AA and another from MA. AA’s ticket rule gives a $150 change fee, while MA says $100.

    In this case, the so-called most restrictive rule is AA’s because they have the higher change fee of $150. So the customer should pay the $150 change fee and any possible fare difference to move their LAX to LUX flight on another day.

    I guess the OP’s travel agent isn’t either aware of that detail, or something on his/her systems wasn’t giving that answer. Thus prompting him/her to ask Continental Airlines about that, and it eventually lead to all this.

  • Joe Farrell

    @Mean – the entire point of a subcontinent call center is to reduce the costs of doing business – you say the words and the training causes the agent to seize on the words you use – and then they read a script – they have ZERO actual authority to actually do anything proactive – are not trained to be proactive and are not versed in much of what they are saying. If you interrupt them – they must go right back to where they left off – yes – you can and often do get poor customer service from many people out there – but the lack of service and reading a script only is endemic to call centers on the subcontinent.

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