I’m a former Air Canada flight attendant, who has been a consumer advocate on car fares for years. So, when a story broke recently about the Canadian carrier allegedly defrauding the U.S. government by charging it to flights that it never even attempted to take, I was furious. No one is supposed to be able to commit fraud like this, let alone a company that is supposed to be a model of integrity.
The U.S. Transportation Security Administration (TSA) has been under fire several times for an aggressive approach to security that has been called heavy handed and at times abusive. That has prompted calls for a complete review of the TSA and the Homeland Security Department. And last week, the Department of Homeland Security announced that it will be launching a new air security initiative that would replace the current TSA and give airlines more control over security.
When Air Canada told the DOT that it was OK to commit fraud, the US government retaliated harshly.
on July 20, 2021 by Gary Leff
Air Canada was recommended to be fined $25.55 million by the US government for selling tickets to consumers, canceling their flights, and refusing to provide refunds. Customers protested to the Department of Transportation, but Air Canada argued they were not bound by US law. And, despite the allegations of the US government, Air Canada said that the law does not mandate refunding consumers when an airline fails to deliver the paid-for service nonetheless.
The Department of Transportation’s reaction to this foolishness is ruthless, in typical understated legalese.
Air Canada tries to convince the Office of Hearings that its conduct was legal and that the Office of Hearings cannot conclude differently. Air Canada relies on three reasons to reach this surprising conclusion:
(1) OACP relied on nonbinding advice; (2) OACP filed this lawsuit without providing sufficient notice; and (3) Air Canada’s no-refund policy is in accordance with Canadian law and its own contract of carriage.
The first two reasons are incorrect and have no basis in reality, while the third argument is irrelevant and is being used by the carrier to deflect attention away from how the carrier injured customers by refusing to provide the service for which they paid.
Air Canada is currently attempting to reach an agreement with the United States government. Expect them to agree that they are subject to US law while flying to the US and selling tickets to US customers (obvious), that refunds are needed when flights are canceled (anything else is fraud), and that the amount of penalties they pay will be much less.
They’ll very certainly be given credit for the refunds they’ve given to consumers, which they did only after the Canadian government gave them subsidies much greater than the refund amounts and made refunds a condition of picking taxpayer pockets up north.
At this point, what important is that consumers understand that although scamming customers may be legal in Canada, it is not acceptable here, and that customers must remember and be reminded that Air Canada was a bad actor during the epidemic. Of course, United was as well – but they caved in to DOT pressure.
(Photo courtesy of @travel33t)
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