The Biden administration on Wednesday slapped airlines with new rules that trigger instant refunds when flights are canceled and clamp down on “surprise junk fees.”
Under the new Department of Transportation mandates, airlines must issue full cash refunds automatically rather in response to customer requests — including when flights are canceled or significantly changed — when baggage return is significantly delayed and when customers do not receive inflight amenities like Wi-Fi for which they had paid.
“Passengers deserve to get their money back when an airline owes them — without headaches or haggling,” Transportation Secretary Pete Buttigieg said.
The other new rule aims to bring more transparency to the costs of booking a flight by scrapping so-called “surprise junk fees.”
Airlines will have to disclose up-front charges for things like checked and carry-on bags, canceling or changing a reservation as well as mandatory carrier-imposed and government charges.
These costs must now be listed “clearly, conspicuously, and accurately” on airlines’ respective web platforms or when they provide fare prices offline.
The transparency rule also includes a provision to eliminate “discount bait-and-switch tactics,” where airlines offer discounts that may appear to apply to the whole flight price but really just apply to a smaller portion of the price, according to CNBC.
Buttigieg estimated that the disclosure requirement could save consumers upwards of half a billion dollars a year in unexpected fees.
“Airlines should compete with one another to secure passengers’ business — not to see who can charge the most in surprise fees,” he added, per CNBC.
The Biden administration has also proposed additional bans on extra seating fees for parents trying to sit next to their children.
The administration also wants to make certain amenities mandatory and to expand accommodations for travelers who use wheelchairs, CNBC reported.
The Department of Transportation’s Wednesday release on the new rules did not specify which amenities were being targeted.
The latest regulations are part of Biden’s larger effort to crack down on junk fees, which the White House has referred to as “corporate rip-offs.”
Last month, the Democratic president’s administration put a cap on all credit card late fees — a move that regulators say will save Americans up to $10 billion a year.
The Consumer Financial Protection Bureau’s rule has set a ceiling of $8 for most credit card late fees or require banks to show why they should charge more than $8 for such a fee.
The mandate brings the average credit card late fee down from $32.
For reference, bureau estimates banks brought in roughly $14 billion in credit card late fees a year.
Similarly, the Federal Trade Commission proposed a rule late last year to ban any “hidden and bogus” junk fees masking the total cost of concert tickets, hotel rooms and utility bills.
“The proposed rule would prohibit corporations from running up the bills with hidden and bogus fees, requiring honest pricing and spurring firms to compete on honesty rather than deception,” FTC Chair Lina Khan said in October. “Violators will be subject to civil penalties and be required to pay back Americans that they tricked.”
