The DOT has taken the unusual step of issuing a press release noting that it is examining the “United Airlines mistaken fare” and will determine whether or not United must honor the fares purchased. My gut tell me this game is already over and that consumers have lost.
I am a contract lawyer, but let’s keep things simple for now. We have the following rule against airfare post-purchase price increases, codified in 49 U.S.C. 41712 §399.88(a):
It is an unfair and deceptive practice within the meaning of 49 U.S.C. 41712 for any seller of scheduled air transportation within, to or from the United States, or of a tour (i.e., a combination of air transportation and ground or cruise accommodations), or tour component (e.g., a hotel stay) that includes scheduled air transportation within, to or from the United States, to increase the price of that air transportation, tour or tour component to a consumer, including but not limited to an increase in the price of the seat, an increase in the price for the carriage of passenger baggage, or an increase in an applicable fuel surcharge, after the air transportation has been purchased by the consumer, except in the case of an increase in a government-imposed tax or fee. A purchase is deemed to have occurred when the full amount agreed upon has been paid by the consumer.
We also have this specific mention of mistakes fares in a FAQ section of the DOT guidelines–
Does the prohibition on post-purchase price increases in section 399.88(a) apply in the situation where a carrier mistakenly offers an airfare due to a computer problem or human error and a consumer purchases the ticket at that fare before the carrier is able to fix the mistake?
Section 399.88(a) states that it is an unfair and deceptive practice for any seller of scheduled air transportation within, to, or from the United States, or of a tour or tour component that includes scheduled air transportation within, to, or from the United States, to increase the price of that air transportation to a consumer after the air transportation has been purchased by the consumer, except in the case of a government-imposed tax or fee and only if the passenger is advised of a possible increase before purchasing a ticket. A purchase occurs when the full amount agreed upon has been paid by the consumer. Therefore, if a consumer purchases a fare and that consumer receives confirmation (such as a confirmation email and/or the purchase appears on their credit card statement or online account summary) of their purchase, then the seller of air transportation cannot increase the price of that air transportation to that consumer, even when the fare is a “mistake.”
A contract of carriage provision that reserves the right to cancel such ticketed purchases or reserves the right to raise the fare cannot legalize the practice described above. The Enforcement Office would consider any contract of carriage provision that attempts to relieve a carrier of the prohibition against post-purchase price increase to be an unfair and deceptive practice in violation of 49 U.S.C. § 41712.
So based on a literal reading of the text, it seems clear that United has no choice but to honor these fares.
So why do I think the DOT will let United off?
The 4-mile first class fare, for starters. Yes, we could distinguish the two cases in that in the 4-mile case, the correct amount showed until the final screen when it repriced to four miles per ticket. And yet under DOT rules “a purchase occurs when the full amount agreed upon has been paid by the consumer” and on that final page only four miles were showing. The DOT could have forced UA to honor the fare, but instead reasoned, “The evidence does not support a finding that United engaged in an unfair and deceptive practice in violation of the relevant statute.”
The DOT will find some way to let UA off the hook for this “mistaken” fare — and is in the process of revising the rules anyway to exclude deals like this. That is easier said than done, but I imagine a ruling that mentions that consumers had to manipulate united.com in order to book this fare (they cite the Danish website in the above press release) while perhaps leaving an opening for recourse for those with bonafide Danish billing addresses.
On a totally unrelated legal note, UA may skirt DOT law to go after customers who fraudulently chose a Denmark billing address even though their credit card was associated with a US address. It was not fraud to use the Danish site, but it was fraud (wrongful deception intended to result in financial or personal gain) to put a U.S. street number and city but Denmark as the country. Not judging here, just speaking from a legal perspective.
I expect the DOT to come down with the bad news on Tuesday (Monday is a holiday in the USA). For those waiting with baited breath, why not take a breather and try to enjoy this weekend? It will be a couple more days before we know what will happen, even if the writing is already on the wall.