How the Department of Transportation Views United’s 4 Mile Hong Kong Award Tickets

This is totally in the weeds and the sort of thing that will be interesting to a small subset of my readers, but here’s a response to a Department of Transportation complaint that was shared with me.

Note that I did not file such a complaint, but I do find the response interesting nonetheless, in so far as it sheds light on current DOT thinking about mistake fares and the interpretation of their current regulations which require airlines to honor tickets that they sell without raising the price of those tickets after the fact in most circumstances.

Passed along without further comment:

This is in regard to your complaint against United Airlines (UAL) about certain Mileage Plus Award tickets to, from, or via Hong Kong that could be acquired on UAL’s website between July 14 and July 15, 2012. Information that we have obtained to date from affected consumers and the airline, including screen shots taken from various steps in the booking process, reflects a discrepancy in the mileage amounts required to be paid for these tickets. More specifically, the mileage amounts, as they appeared on the website’s mileage award tables, itinerary selection page and at the top of the itinerary purchase page, were significantly higher (e.g., 320,000 miles plus taxes and fees for a roundtrip ticket) than the amount displayed as the “total price” on the itinerary purchase page (i.e., four miles plus taxes and fees). In short, it is unclear what full price was offered. We will continue to investigate this matter to determine the full price of these tickets, whether that full price was, in fact, paid by the consumers, whether the airline issued tickets upon full payment, and whether the carrier raised the price after full payment was made and the tickets were issued.

As you may be aware, the Department recently issued a regulation, 14 CFR 399.88, that is intended to prevent airlines from unfairly and deceptively raising the price of a ticket after a consumer has paid in full and purchased that ticket. As stated in the regulation, such conduct would constitute a prohibited unfair and deceptive practice under a statute enacted by Congress, 49 USC 41712. The goal of our investigation is to determine whether UAL has acted unfairly or deceptively to consumers who acquired Mileage Plus Awards tickets as described above. Please note that, regardless of the outcome of our investigation, consumers are free to pursue claims (e.g., a breach of contract claim) against the airline in an appropriate civil court for monetary damages and other remedies particular to their situation.

XXXXXXXXXXXXX
Aviation Industry Analyst
Aviation Consumer Protection Division
Office of the General Counsel
US Department of Transportation

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community Milepoint.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. This is the kind of response I expected. UA and its lawyers seem to have predicted such a response and come to the conclusion that there were enough opportunities for customers to know and understand the correct price. DoT doesn’t agree or disagree with this interpretation just yet, but it admits that information was available. If DoT’s statement had completely ignored the award tables, itinerary selection page, and the top of the itinerary purchase page, I would be very concerned about UA’s position.

  2. I’d be surprised if they continued to honor the tickets once they straighten this out. They have a good argument that this isn’t covered by the regulation. The key to me was always that there were two different “prices” listed on the page so there was an obvious discrepancy. The correct price was listed and quoted, but they then charged an incorrect amount. If that top part of the screen weren’t there, I think it would be a closer call.

  3. You should reach out to David Bernstein to see if any of his Georgetown friends has an opinion on the DOT’s likely final position.

  4. When I booked my intinerary (multi-city) not once was there a larger amount of miles shown except the end price of 4 mile plus taxes and fees.
    I would also like to know how they can cancel my ticket when I own possession.

  5. It’s interesting that this letter at the end almost suggests that the customer file suit in civil court if they want to pursue it further. I’m not going to do that, but that’s an odd thing in a letter from a regulator.

    I have a feeling that those dedicated enough to take it that far will get some token offering from United.

  6. I for one would not want to pursue this matter against United in civil court for fear that it would prompt them to cancel my Mileage Plus account.

  7. “Please note that, regardless of the outcome of our investigation, consumers are free to pursue claims (e.g., a breach of contract claim) against the airline in an appropriate civil court for monetary damages and other remedies particular to their situation. ”

    I would recommend:

    http://peoplescourt.warnerbros.com/

  8. Shane – Is your contention that you were unaware that the 4 miles plus taxes and fees was a mistake? Can you state with a straight face that you were deceived by United?

  9. Doh… Bernstein’s at George Mason, not Georgetown. It’s Randy Barnett who is at Georgetown… Point still stands… see what one of the smart lawyers at the Volokh Conspiracy thinks! 🙂

    @bluto, that language is pretty boilerplate for the gov’t. Agencies don’t want to be responsible for people waiting for the result of the agency investigation and then being barred from suing on their own.

  10. @Shane, United has taken the position that a large number of mistake fares were not fully paid for because the 4 miles were not deducted. In this case, it’s possible that the DoT regulation would not apply because it requires full payment for the mistake fare to be honored. Those reservations for which the correct, larger number of miles were deducted are still intact, though United has agreed to cancel them without penalty (for non-elites) if requested.

  11. @scottrick why am I penalised if their computer system didn’t take out the correct number of miles?

  12. @UATruthSquad – actually, while it may be a violation of an airline’s contract of carrier (provided you do not fly the segments as-booked), it is decidedly not fraud.

  13. I agree with Shane. Would think it is United’s responsibility to deduct the 4 miles and not the case where the consumer provided invalid credit card (non payment in such a sense)

  14. @Shane. It appears that the DOT regulations allow them to cancel the ticket if you did not pay in full. It doesn’t say there is an exception if the reason you didn’t pay in full is because of an error with the airline’s computer system. It appears this is the technicality that explains how United plans to get out of it.

  15. @Shane, I actually think this is a very clever self-defense mechanism, although I don’t think it was intentional. If United’s argument holds with the DoT, I can imagine airlines automatically preventing payment transactions from occurring if they fall below a certain threshold. E.g., very rarely will you see award flights for under 10,000 miles, so flag it and don’t deduct the miles just yet. For revenue fares, create dollar thresholds like $300 for US to Europe. Flag it and wait for someone to check before actually processing the transaction. If DoT decides that mistakes are irreversible once they’re paid for, then make sure you avoid collecting payment!

  16. There are two scenarios here:

    #1 – you did not have ample miles, and UA deducted no miles. Therefore, you have not “paid in full” and the reg therefore is not applicable.

    #2 – you did have ample miles for a regularly priced ticket, that number (perhaps 140,000 with a miles saver first class ticket) was deducted, and the you have therefore “paid in full”, with that payment being the regularly priced number of miles. (perhaps 140,000 as discussed herein. The regulation applies, as there was payment in full, but is has not been violated, as UA is not trying to increase THAT price.

    Contrarians presuppose that the “price” for the purpose of the regulation is 4 miles. This is simply too facile. I wish it was so, but knowing how one sets up an online reservation, clicking specific numbers of miles, and getting to a screen which is ambiguous as to the number of miles required, I just cannot see the argument that there was an agreement between the parties as to the number of miles, or the “fare” in the first instance.

  17. “When I booked my intinerary (multi-city) not once was there a larger amount of miles shown except the end price of 4 mile”

    So what you are saying is that you proceeded with a booking, where absolutely NO amount of miles to be used was listed. You didn’t know if the required miles was going to be 4, or 400K, or 4 million, and yet you continued the booking process without knowing that. Right up to the final page, where you went oh, 4 miles, that seems normal?

    I sincerely doubt that one single person, other than the reader who emailed Gary about it, booked this deal without having read about it on one of the travel blogs. All of which described this as a “mistake fare”. In fact, many called it a “lottery ticket” booking, since there was only a slight likelihood that United would honor it. To have booked it, as Mommypoints said, as: “cheap entertainment on a Sunday afternoon!” is one thing. To try to claim that United “duped” you into booking this and is now somehow reneging on the deal they offered you is absurd.

    And no, I don’t work for United. Years ago I had such terrible treatment by UA gate attendants and Fas that I have refused to fly them since. While I could post a nearly endless list of reasons I don’t like UA, I can’t fault them for this at all. It was a computer glitch, that’s all, and they don’t owe you anything for not giving you what you knew was the result of an error when you booked it.

  18. 1: It is afar less expensive for UA to buy a few senior DOT opinions than to honor those 4-mile tickets.

    2: I wonder if the UA programmer is still employed at said airline.

  19. I find it funny the people who get outraged and want to sue over this and similar situations. It was a mistake, they fixed it, you got refunded. Quit trying to rob businesses.

  20. My itinerary has been canceled and I’m ok with that. (Though the communication is a big disappointment.) But I do not buy the “not paid in full” argument. I had 4 miles in my account. I authorized them to deduct those. I provided my cc info and authorized them to charge the taxes and fees amount. Whether they did it or not is back on them. I provided them payment — in full.

  21. People complaining about this really need to grow up. I purchased one of these trips, but I do not expect it to be honored. It’s a mistake. You’re not owed anything.

  22. @Up&Away: and to top it all off, we received receipts which acted as confirmation of the purchase, both for the monetary and $ payments due. That is the definition of a receipt.

  23. For the argument of whether one paid “in full” when there were not enough miles in the account. I have a question, for those who had enough miles in their account and the receipt shows 4 miles, but correct amount was deducted after the purchase, the person not only paid in full but also was charged more than what was shown on the receipt. How do you justify this? Does this fall under DoT regulations?

  24. I can’t believe the freeloaders aren’t letting it go. It was an obvious mistake, and there cannot conceivably have been any intent to defraud or deceive anyone. United will give you back your freaking four miles. Get over it already.

  25. I have read of two scenarios so far.
    1) Not enough miles – apparently they were not deducted; hence the cancelations.
    2) The correct miles deducted – you may keep your ticket or cancel with no penalty.

    What about scenario 3. Purchased ticket for 3 people on one itinerary, but had enough deducted for one (140k deducted, but receipt was for 12miles). Still a deal 3 for1. Email from United states right amount deducted and you may keep or cancel your reservation.

    What do you do? Wait till you show up at the airport?

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