DOT Issues Ruling On United Mistake Fare — Here’s Their Logic

Travis is my first new contributor to the blog, who will be posting a couple of times per week. The idea behind adding guest contributors is to add different perspectives to the blog. Travis has a unique approach towards travel, given that he travels almost exclusively with his wife and young children, which is in stark contrast to my travels, which are usually alone.


By now you are likely aware that United had a so-called fare mistake on the morning of February 11th in which it was possible to buy first class tickets from England to the US at deeply discounted prices.

Ben didn’t think the fare should be honored and wrote Let’s Be Reasonable About Yesterday’s First Class Mistake Fare. I wrote a dissenting opinion with United Should Man Up And Own Their Great Dane Mistake.

Naturally the discussion was heated on both sides, as is usually the case with these things. It actually got so bad on FlyerTalk that they had to temporarily shutdown the thread to give everyone a cooling off period.

Well, the ruling is now out. And the Department of Transportation is siding with United:

After a careful review of the matter, including the thousands of submissions from consumers and information from United, the Enforcement Office has decided that it will not take action against United for not honoring the tickets.

Obviously I don’t agree with the ruling. But I will commend the DOT for issuing it in an expedient manner. It was also somewhat expected given the intimations that the DOT has made lately.

600px-Seal_US_DOT

Here is the complete text, text which was posted to the DOT website:

The U.S. Department of Transportation’s Office of Aviation Enforcement and Proceedings (Enforcement Office) has completed its review of the mistaken fares that appeared on United Airlines’ (United) Denmark website on February 11, 2015. During the past two weeks, thousands of consumers who purchased tickets from United’s Denmark website at the mistaken fare levels have contacted the Enforcement Office asking that United be required to honor those fares based on the Department’s rule against post-purchase price increases of scheduled air transportation.

After a careful review of the matter, including the thousands of submissions from consumers and information from United, the Enforcement Office has decided that it will not take action against United for not honoring the tickets. The mistaken fares appeared on a website that was not marketed to consumers in the United States. In order to purchase a ticket, individuals had to go to United’s Denmark website which had fares listed in Danish Krone throughout the purchasing process. In addition, only people who identified “Denmark” as their location/country where billing statements are received when entering billing information at the completion of the purchase process were able to complete their purchase at the mistaken fare levels. Consistent with the Office’s treatment of fare advertisements and disclosure of baggage fees, it does not intend to enforce the rule in question (the post-purchase price increase prohibition) when the fare offer is not marketed to consumers in the United States. Additionally, the Office is concerned that to obtain the fare, some purchasers had to manipulate the search process on the website in order to force the conversion error to Danish Krone by misrepresenting their billing address country as Denmark when, in fact, Denmark was not their billing address country. This evidence of bad faith by the large majority of purchasers contributed to the Enforcement Office’s decision.

To ensure that the Office’s determination that United is not required to honor the mistaken fare is available to all affected consumers expeditiously, the Office is placing this notice on its website rather than responding separately to each individual who has contacted the Department. The Office has also agreed that United may choose to post information about its handling of this incident in a prominent location on its website instead of providing individual responses to consumers who submitted an inquiry to United or the Department regarding this matter. We believe that posting of information by the Department and United is the best course of action as it offers the most effective means of reaching as many consumers as possible at the same time.

What do you think of the ruling?

Comments

  1. Do you know if they could still be sued over the matter? It seems now as a German resident, I’m never subject to DOT’s protection for some cases, because I’m not a US consumer…

    “Consistent with the Office’s treatment of fare advertisements and disclosure of baggage fees, it does not intend to enforce the rule in question (the post-purchase price increase prohibition) when the fare offer is not marketed to consumers in the United States”

  2. I think DOT was looking for any excuse to let UA off the hook and, since it wasn’t a straightforward booking on UA site, they let UA cancel all the tickets. I bet all the “lawyers” on FT are having a field day.

    However, is this statement correct? It makes it sound like DOT only wants to be involved in tickets originating in the US and not tickets where the destination is in the US?

    Consistent with the Office’s treatment of fare advertisements and disclosure of baggage fees, it does not intend to enforce the rule in question (the post-purchase price increase prohibition) when the fare offer is not marketed to consumers in the United States.

  3. Lol United, the same airline that is suing some poor guy for his site that shows people how to do something that is completely legal.

  4. I think I agree with the DOT here… It seems to me that folks put in false information (wrong home country) in order to trick the system.

  5. As it pains me to say, I completely agree with the DOT ruling. People from the US who bought one of these fares (myself included) did so in bad faith as we stated our billing country as being Denmark when in fact it is not. Is this a big deal most of the time, no? Is this being used as sort of a cop-out? Probably. But at the end of the day we did misrepresent ourselves when purchasing and thus giving DOT and United a way out.

    One thing however, for those Danish residents who did get the fare, I believe UA should honor those tickets as they truthfully stated their billing address.

    For everyone else, it was done in bad faith, accept it and move on.

  6. I agree with the decision and with the reasons given. I think they suggest that the DOT will continue to enforce fares that are booked innocently/without deception on the part of the purchaser.

  7. TPG posted similar…

    I think the portion which should have been highlighted was: “This evidence of bad faith by the large majority of purchasers contributed to the Enforcement Office’s decision”

    In short, b/c people jumped on this deal knowingly in bad faith AND there were soooo many people that did so….not going to be honored.

    Pretty sure all the whining “per ticket” (not PNR) didn’t help either that TPG was saying everyone should do. Since they say “thousands of submissions” and assuming F class @ about $2-$3k/ticket…why would they take a bath of…conservatively…$10-$15MM??? Ludicrous…especially for as they put fraud lightly..”bad faith”

  8. “Obviously I don’t agree with the ruling.”

    is it because you really do live in Denmark? or perhaps you’re just selfish, entitled, and have no morals?

  9. Also agree with DOT. People need to tone down their sense of entitlement and stop being a bunch of whiny brats.

  10. Thank goodness! I’m actually surprised they didn’t cancel the frequent flyer accounts of the people that did it. I guess that lying about your billing country is not a severe enough offense. A few years ago there was a way to manipulate the website by opening several tabs at once and switching back and forth between them, to get severely discounted tickets, and many people who did so got their mileageplus accounts closed.

  11. I think it’s likely that United’s incompetence that they failed to stop issuing tickets until some 5 hours after it went viral has helped their cause here ironically. Had it only been a few hundred tickets then the DOT probably would have forced them to suck it up and honour the tickets.

    I’m disappointed that the DOT has not sanctioned United for a clearly inadequate reservation system.

  12. I agree with the DOT on this one. I am unsure of EU law but in the US we do have something called “reasonable expectations”, would it be reasonable for United to sell a premium cabin ticket for about USD $70? No. The other question would be did United try to “deceive” customers? Again no. People knew full well that these fares weren’t legit. In the U.S. you wouldn’t have a case.

  13. It is not surprising but the reasoning behind it they gave is a complete bull. 399.88 (a) clearly states **to** and from the United States, so saying the rule doesn’t apply because the PoS is in DK instead of the US is just ridiculous.

  14. No one likes an “I told you so,” but I did, as some of you might recall. The misrepresentation of a Denmark address apparently proved decisive, I think.

    Legal and regulatory matters are frequently mind-bogglingly complex and often depend upon a myriad of historical, interpretative and factual nuances and details.

    Here I think they actually got it right as well, but that’s just my personal opinion.

  15. The DoT gave a completely ridiculous reasoning. It is supposed to regulate airlines that fly to and from the US, including ALL the customers that fly on them, not just US-based customers.

  16. I think the DoT came out with the best possible option here. I remember reading an opinion from someone who said they were going to complain to the DoT about the issue specifically because United was using the excuse that a third party had mistakenly posted the fares. That justification was more egregious to me than United actually canceling tickets and opened the door for other reversals in the future where tickets might have been sold in the US. I think the DoT response is reasonable and I am glad they provided guidance of their rationale so that United cannot claim third party problems for future issues.

  17. I do think it will be interesting as to whether this spells the eventual end to mass mistake fares (i.e., those that get lots of bookings, usually due to publicity on blogs, FT, etc.) that the airline does not voluntarily or willingly honor. Although the DOT specifically references the United website manipulation, if the bad faith test is employed more broadly in the future (e.g., a reasonable person should have known the fare they booked was a mistake), then mistake fares may be an endangered species.

  18. I would like to know which country I, as resident of Finland, should choose as my website when buying ticket directly from UA considering there is no Finland available 🙂 Denmark? Sweden? USA?

    BTW I just did dummy booking from Denmark site with everything including passport information and country correctly selected. It is still pricing it as DKK…

  19. This was exactly what I expected – DOT really can’t order an airline to honour purchases made in violation of a website’s Terms of Service. Was a little disappointed to not see them order UA to honour the purchases for actual Danish residents, but their logic could be (if nothing else) that those customers have stronger protection under Danish or EU regulations and can pursue those remedies, especially since it was a Danish website.

  20. I always thought the filling in of the bogus country is what they would latch on to, and it appears to be the case. Without that factor i would have been surprised by a pro-United ruling.

  21. It’s a business decision. Not a safety/security one. United can decide whatever it wants, regardless of whether or not you think it’s right. Folks just need to speak with their wallets and take their business elsewhere if they feel snubbed by an airline. An airline is a business, not a public service. No one is entitled to anything. Frankly that the US DOT even got involved in the matter is a waste of resources. They should be monitoring how airlines deal with disabilities, discrimination, or ensuring maintenance is done well for example – not people whining because their 50 buck overseas first class ticket wasn’t honored.

  22. @CraigTPA

    Does the fact they won’t honour tickets purchased by Danish residents not prove that this is nothing more than an excuse. Why even use it as a reason if they are not honouring tickets that were purchased in Denmark?

  23. @StephenBenjamin

    You are probably certainly welcome to sue, but it’s highly likely that, in light of the DOT’s interpretation of their own regulations and their decision not to force UA to honor the tickets, the only remedy available would be through standard contract doctrine, which is clearly on United’s side here. WHen there is a unilateral mistake by one party (UA) and the non-mistaken party knew or should have known that the other side was making a mistake (which, given the lengths one had to go to to get the mistake fare, wouldn’t be hard for UA to show), then the contract is rescinded, which means that the ticket would be cancelled here.

  24. While I’m always up for the underdog “sticking it” to the “man”, I think what the DOT is doing is only fair. But I think the airline should be held accountable for their mistake too, and not blame the 3rd party software provider. It’s only fair, considering if a passenger ends up late for a flight because of a subway delay or traffic jam, they can’t get off by blaming their commute. No, they have to cough up the fees to either rebook or buy a whole new ticket altogether. And yes, they probably could just leave for the airport a whole 4 HOURS earlier instead of 3 (NY’ers, can you feel me?), but there’s only so much you can control. The same way passengers are held accountable for those types of things, airlines should be too. United obviously doesn’t want to take a multi million dollar hit, but they should take responsibility for their part in choosing that company they used, and could have done a better job at making sure that what they pay them for gets done properly. If not, then like Juan says, sue the company for the loses. Sadly, not much I can do about the MTA or NYC traffic, though, so kind of always have to bite the costs there. I think ultimately, people just are tired of the double standards.

  25. I agree with the DOT decision and rationale. I’ve never subscribed to the “take no prisoners/scorched earth” buccaneering attitude that some in this hobby espouse.

  26. Good job DOT, this is the right decision.
    I’m really glad these tickets are not getting honored…couldn’t stand the ridiculous reasons people were posting to claim these tickets were valid.

  27. my F ticket still stands and I have already traveled my JFK-FRA-NRT let yet typing this from NRT. Off to SYD soon. I have said that before one needs to do a small simple(smart) change to the ticket so that it is re-ticketed and billed in the US. Easy as pie

  28. Isn’t it fantastic when private companies do not have to own up to their own mistakes and be saved by governments?

    Who cares about implementing expensive control systems and procedures. If anything untoward happens, the government will bail you out! Marvellous!

  29. “Additionally, the Office is concerned that to obtain the fare, some purchasers had to manipulate the search process on the website in order to force the conversion error to Danish Krone by misrepresenting their billing address country as Denmark when, in fact, Denmark was not their billing address country. This evidence of bad faith by the large majority of purchasers contributed to the Enforcement Office’s decision.”

    Exactly. A logical decision by the DOT.

  30. I disagree with the basis of DOT’s finding, because it departs (ba dum) from their own rule as noted in the Norwegian Wideroe decision. United’s lawyers couldn’t have suggested a better interpretation of the statute.

    Their determination that passengers were “acting in bad faith” is equivalent to adjudicating guilt (not sentencing of course). Hard to see how that is a determination that is made outside of a courtroom and not ignored when factored into their plain reading of their own rule (and concurring expository material) as it currently stands in the federal register.

    United could certainly bring legal action as the one harmed by the error, both against the currency exchange company and against those who may have “acted in bad faith” to demonstrate that in fact they did act in bad faith or performed a criminal or civil violation. The DOT, however, is not a court of law to determine whether people acted in bad faith and then make a decision based on that determination.

    I certainly can’t take this further myself, but I am disappointed in the way they’ve tried to reach this decision, even if the ultimate outcome would have been the same.

  31. @Nick. The DOT did not “adjudicate guilt.” United cancelled the tickets, or was about to, and then people looked to DOT to make United honor them. If you want to sue United for “unfairly” cancelling these tickets, then do so. But the DOT has a right to enforce, or not enforce, its own laws as it sees fit. Not every speeder needs to be ticketed, not every one who jaywalks needs to be punished, not every company that violates the most relatively insignificant regulation needs to be fined. The government has the right to enforce its laws selectively-it can’t possibly go after everyone who breaks the law to the full extent of it.

    And the DOT wrote the rule. They can decide when and how it should be enforced. The people who lied and said they were from Denmark did not have the facts or, frankly, justice on their side.

  32. @Ann and @Al It’s funny that this administration’s DOT has now “found religion” saying they will not enforce the tickets because the purchaser manipulated the country they were in. This from the same administration which allows hundreds of thousands to waltz unaccounted for across the border and then seek to give them asylum and legal status.

  33. Regardless of whether or not it’s a good ruling, their argument strikes me as a bit sloppy.

    They contend at first that the reason it shouldn’t be enforced is that it does not concern US-based buyers. Fair enough.

    But then later they say this: “This evidence of bad faith by the large majority of purchasers contributed to the Enforcement Office’s decision.”

    Well, which is it? Bad faith, or not being US based? Those are distinct reasons that should not need to stack.

    It strikes me as strange that after giving a perfectly fine reason for why it’s not enforceable, they have to back-pedal and add the “bad faith” thing.

    If the users were acting in good faith, would that mean a different ruling? But they just said that it was because buyers weren’t US-based, which has nothing to do with that.

    Just sloppy, IMHO. They sound like they’re just trying to find reasons to not enforce it.

    (I have no skin in this game – I didn’t get one of these booked, and don’t even think United *should* have to honor it. Just forcing on the quality of their argument.)

  34. @Ben Hughes – Why does it have to be either/or? Who says DOT can only have one reason for ruling in a given way?

  35. @Nick

    There was no “determination of guilt”made by the DOT. Their regulations exist as a way for consumers to regulate and enforce airlines outside of the courts. If the only remedy were a private action in cases like these, airlines would simply run rampant against consumers. No one would ever sue an airline about a plane ticket because the litigation costs would be way too high and the facts in these cases would make forming a class action nearly impossible. The DOT provides a way for people to complain and enforce airlines when they actually do things that hurt people. The fact that they didn’t extend this generous benefit in this case is merely an acknowledgment of the fact that no one was actually hurt by UA’s decision to cancel tickets (and to my knowledge UA didn’t cancel tickets already in use).

    @ Mark

    The DOT is not the DHS or the USCIS. While the executive branch is technically in charge of all of them, what one decides to do policy wise has very little to do with the other. Also, if you knew anything about immigration law, which you clearly don’t, you would know that whatever relief has been proposed by the DHS has nothing to do with asylum. Asylum is a very specific method of gaining citizenship in this country and its not all that easy to come by. Also, regardless of how many people come across the border, we only have the capability of deporting so many (right now, the budget allows us to deport 1 in 10 undocumented people per year). All the executive order would do would acknowledge that certain people are not going to be deported anytime soon and thus should have a work permit and be required to pay taxes. It’s not permanent and it could be revoked at any time.

  36. Well, the DOT decision did come of no surprise to me; in the end it’s fair, however, coming from the European side, the main point of the decision with regards to the “billing country” needs to be opposed strongly. As within the EU it’s completely legal to apply any EU country domicile if this results in a lower price. This principle has been backed by many court orders so far. According to a friend at UA, this is one issue they currently fear the most, especially after this being the main offical reason of the DOT – that someone from Europe (and even better from DK) calls the regulators here.

    As mentioned before, you win some, you gain some; so the decision is fine with me. But the decision by UA is really only about business, not something else.

  37. @Brendan: I’d call it a “loophole” or a “technicality”, not an “excuse”: if someone enters into a contract by deliberately misrepresenting themselves (as all the non-Danish-resident purchasers did), the other party has a right to void the contract. Whether we like it or not, the TOS of the United website in question were violated, deliberately, by anyone who didn’t change the country of residence to their actual country.

    I think eventually either a Danish court or the appropriate EU agency will rule against UA for their dismissing the Danish purchases, since they didn’t involve misrepresentation.

  38. Just another example of how society has lost its “moral compass” The steps that many took to manipulate the process in order to get a fare that clearly was erroneous (Try to book in another currency and the price was much higher)..Flat out lying about their address, clearly indicates that they knew it was wrong and chose to do it anyway. And now they want to talk about suing. What a sad time we live in when people who clearly were wrong want to sue because they didn’t get their way…typical entitlement complex.

Leave a Reply

Your email address will not be published. Required fields are marked *