Lost in translation? Airline cancels reservation but charges passenger anyway

Can an airline charge you for a ticket it canceled? If you said “not in America” you’re right.

Barbara Salvadore booked a ticket from Frankfurt to Vienna last fall through Air Berlin. But when she called the carrier to confirm her flight, a representative told her her tickets had been canceled because of a problem with her credit card. She went to the airport on the day of her departure to see if she could use another card, but the airline insisted that she pay a walk-up fare that was seven times higher than the original price. She decided to take the train, instead.

End of story? Not quite.

I received a letter from Air Berlin stating I owed them money for the flight that I booked. I e-mailed them back, explained to them that they were the one who canceled my flight and I did not fly Air Berlin.

I received my second letter today stating I owe Air Berlin 149 Euro or they will take legal action against me.

I am clueless why I would owe Air Berlin money since I did not fly with them and they canceled my flight. From my e-mail correspondence with them, they do not seem to understand they are asking for payment for a service not rendered.

I thought there must be some kind of misunderstanding, so I contacted Air Berlin on Salvadore’s behalf. Diane Daedelow, a spokeswoman for the airline, responded:

We strongly regret the inconvenience caused. Although, we want to refer to our terms and conditions to which a customer agrees with the booking of a flight.

“Terms and Conditions “Prices / Payment”:

2.3. If a credit card company or bank refuses to settle the claim arising from the contract for reasons that are the customer’s responsibility, the customer shall be required to pay a flat rate of 10 EUR as compensation for the bank’s return debit note. The customer is free, under German law, to prove that the airline did not suffer any loss or that the loss incurred was significantly less.

Otherwise the Airline shall be entitled to terminate the contract in accordance with sections 5.1.1-5.2 and levy the charges stipulated therein if the period allowed for payment has expired without effect.”

Additionally, we learned that Ms Salvadore booked the “Saver fare” modus:

“5.1.2. If a ticket for a short-haul or medium-haul flight (the great circle distance between departure point and destination being less than 3,000 miles) booked as a saver fare is not used or is cancelled, the Airline shall be entitled in accordance with the law to demand the agreed remuneration less any savings in expenditure made and/or possible alternative uses of the service booked. Objections raised by the customer shall be taken into account in accordance with section 5.3.”

Following our database, Ms Salvadore were informed by E-Mail on 16.10.2008 that her credit card could not be charged. But we also learned, due to spam filters not every E-Mail reaches directly the addressed inbox.

As I read the rule, Salvadore might be liable for a 10 euro charge. But billing her for a flight she couldn’t take seemed problematic. I asked Daedelow if the 149 euro charge might be an honest mistake. It wasn’t.

In fact, the number of 149 euro is the outstanding payment for the flight. If a customer cancels a flight booked one day before rsp. the day of departure, the amount of charge corresponds 100% with the price booked. If a customer booked a flight without taking the flight and without a cancellation upfront, the price has to be balanced as well. Due to the fact that Ms Salvadore neither cancelled nor took the flight, the bill about 149 euro has to be acquitted.

I followed up with Air Berlin several times, asking if it could clarify a few things. After all, Salvadore didn’t cancel her ticket — Air Berlin did. Did it do enough to notify the customer and explain her obligations under its terms?

The standard operating procedure in such a case is: with the notice about a problem during the payment procedure e.g. the credit card number given does not exists, Air Berlin extends the time limit in favour of the customer to initiate the payment – or via a valid credit card, alternatively via direct debit to a bank account.

After what I considered to be a very polite back-and-forth with Air Berlin, the airline stopped responding to my questions. So Salvadore is left with a threatening letter that demands payment for a flight she never received.

If this were happening in the United States, the Fair Credit Billing Act would protect her from Air Berlin’s policies. In fact, it is unimaginable to the American consumer that any company could charge for something it never delivered.

I think it all comes down to disclosure. Was Salvadore informed of Air Berlin’s policies? Did it let her know that under its terms, she would be liable for the ticket even if she didn’t fly? If you ask Daedelow, the answer is “yes.” But Salvadore would disagree. Neither the Air Berlin reservations agent nor the ticket agent at the Frankfurt airport warned her of this policy.

I don’t know enough about German law to advise Salvadore on her next move. Should she pay for the ticket and put this matter behind her? Should she ignore the airline and risk litigation?

I take a dim view of travel companies that threaten to sue their customers, so my first instinct would be to fight this on principle.

What’s yours?

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