The United States (US) Department of Transportation (DOT) has fined British Airways $1.1 million for unfair and deceptive practices against consumers, relating to the returning of refunds to passengers.
Announcing the fine on June 1, 2023, the DOT said that between March and November 2020, the British Airways website provided instructions for passengers on how to receive refunds for canceled flights. They were instructed to contact the airline via phone, yet “consumers were unable to get through to customer service agents when calling the carrier for several months during this period because British Airways failed to maintain adequate functionality of its customer service phone lines”.
Furthermore, the DOT alleged that British Airways did not provide any “way to submit a refund request through the carrier’s website during this period” and had “misleading information on its website which led consumers to inadvertently request travel vouchers instead of refunds”.
Since March 2020, the DOT has processed a total of 1,200 complaints from the airline’s passengers claiming that the carrier was not providing timely refunds after it had canceled or changed their flights. In addition, the government agency noted that the airline “received thousands more complaints and refund requests directly from consumers”.
“British Airways’ failure to establish, for several months, a readily accessible method for consumers to request refunds for flights the carrier canceled or significantly changed caused significant challenges and delays in thousands of consumers receiving required refunds” has violated 49 U.S. Code § 41712 and 14 CFR Part 259, with the DOT ordering the airline to cease and desist further action that violates the two regulations, while landing it with a $1.1 million fine.
The decision was made despite British Airways stating that the refund situation must be viewed “in the context of the unprecedented global health pandemic and the resulting astronomical number of flight cancellations, which caused operational and personnel challenges”. The airline was ordered, effective immediately, to close its call centers at the time, with the airline responding by equipping employees to work from home, retraining others to undertake customer service duties, and developing an automatic solution for easily solvable refunds.
British Airways added that “it made it clear that passengers whose flights were cancelled due to Covid could obtain a refund and the voucher application on the website made clear that it applied to vouchers, rather than to refunds”. The airline disagreed that “reasonable customers would have been confused”.
Between March 2020 and December 2021, British Airways refunded over $40 million to customers that “had nonrefundable tickets for flights to or from the United States who chose not to travel and for whom British Airways had no legal obligation to refund”.
Still, the DOT determined that the airline violated the two regulations seriously. It will have to pay $550,000 within six months, while the remaining $550,000 will be “credited to British Airways for refunds that British Airways voluntarily provided to passengers with non-refundable tickets for flights to or from the United States who chose not to travel and were not entitled to refunds under U.S. law”.