Legality of some OTA fees

bigmortgage

When an airline cancels a flight and you are offered a refund, I am keen to understand the legality of OTA's imposing feed to process the refund.

My thinking is the OTA is contracted by you to take you from A to B at a given time. A flight cancellation is a breach of contract, so a fee to refund you would appear to be illegal.

The key is the contract is between you and the OTA, not you and the airline, if it were between you and the airline, then the airline would refund direct.

It would seem if the OTA wants to be compensated due to flight cancellations, the should be charging the airlines rather than their customers.

Thoughts on the legal perspective of whether the fees in this scenario are legal? Many people have been landed with these fees during covid times.

bagand96

bigmortgage said:

My thinking is the OTA is contracted by you to take you from A to B at a given time. A flight cancellation is a breach of contract, so a fee to refund you would appear to be illegal.

The AIRLINE is contracted to take you from A to B.  The OTA is contracted to act as an agent in getting you an airline ticket. They all make this clear in their T&C's.

The key is the contract is between you and the OTA, not you and the airline, if it were between you and the airline, then the airline would refund direct.

As per above, there is a contract between you and the airline once the ticket is issued in relation to transportation.  You've chosen to involve an agent to sit between you and the airline which is why they won't refund direct.

It would seem if the OTA wants to be compensated due to flight cancellations, the should be charging the airlines rather than their customers.

They want to be compensated for the work they have to undertake in liasing with the airline to get the refund and then process it and get it back to you.  They are allowed to make charges for this as long as they are in the T&Cs that the customer agrees to at the point of purchase.  Given that OTA's make no charge for their service in the first instance, admin fees is a big part of how they cover their operating costs and indeed make a profit.

Thoughts on the legal perspective of whether the fees in this scenario are legal? Many people have been landed with these fees during covid times.

It is entirely legal to put admin fees into a contract, as long as they are notified at the time the contract is entered into and agreed to.  All of which the customer does.

The only potential get out is if the contract term itself is fair.  The Consumer Rights Act 2015 says contract terms have to be fair. A customer could contest that a contract term is unfair, but they might have to escalate the issue to a court or arbitrator or similar.  It obviously depends on what the fee is and how it would be assessed as fair or not.

Part of the problem is people are more than happy to book with any old unknown agent, often based in a foreign country, just because it's £20 cheaper on the comparison site.  Then they find they have an issue and don't like the admin fee that they agreed to.  It's too late by then!

Westin

^^ +1

 Good summary @bagand96

CKhalvashi

@bagand96is completely correct.

If I work, I want to be paid for it, especially if I'm providing a largely unprofitable service to begin with. Such agencies don't make their money on flights, they make their money on changes, and 99% of their work (in normal times) has a profit margin below 1%.