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Airlines should return cash to travelers — not just offer vouchers, lawmakers say

How coronavirus has affected the airline industry
How coronavirus has affected the airline industry 02:21

Lawmakers and consumer advocates says airlines should offer cash refunds, and not just travel vouchers, to Americans who canceled flights due to the coronavirus. Airlines are holding onto about $10 billion from travelers whose plans were upended, said Senator Ed Markey, a Democrat from Massachusetts, in a conference call on Wednesday to draw attention to the issue.

Markey and other Democratic senators, including Elizabeth Warren of Massachusetts, are introducing a bill that would require airlines to provide cash refunds to customers whether their plans were disrupted because the carriers canceled the flight or the passengers decided not to fly given the pandemic.

More than 250,000 consumers have signed three petitions asking airlines to make good on canceled tickets, according to Consumer Reports, which said it has heard from readers who were upset at receiving vouchers. Some consumers said they were unsure of when they might be able to travel again, with public health experts warning that social distancing may need to be in effect through 2022. 

One of those is Jennifer Stansfield-Marek of Colorado, who started a petition on asking airlines to provide cash refunds rather than vouchers. 

"My husband and I had been planning a once-in-a-lifetime trip to Italy to celebrate our 40th birthdays," she said in the call, which was organized by Consumer Reports and U.S. PIRG. But because of the pandemic, the trip was canceled.

"When I called United and asked for a refund, I was offered a voucher, which I declined," she said. "I'll never be able to use that voucher before it expires, which means I'm out almost $2,000."

Stansfield-Marek said the petition — which has almost 150,000 signatures — made her realize that many other travelers are in the same situation. "We understand the airline industry is going through an unprecedented crisis, but so are we, and we don't have the benefit of a multibillion bailout," she added. 

"No-interest loan"

Consumers are essentially providing "no-interest loans to the airlines," said Anna Laitin, director of financial fairness and legislative strategy at Consumer Reports, on the call. "It's simply unfair."

The bill, called the Cash Refunds for Coronavirus Cancellations Act, would require airlines and third-party ticket sellers to provide full cash refunds for all canceled tickets during the pandemic, regardless of whether the airline canceled the flight or passengers canceled their ticket. Airlines and ticket sellers could provide travel vouchers, but they would need to be valid indefinitely and include a notice of the flyer's right to a cash refund. 

Airlines are supposed to offer cash refunds to travelers if they cancel a flight, even if it's beyond their control, according to the Federal Trade Commission. But that hasn't been the case since the coronavirus outbreak, critics say, especially for consumers who canceled their plans due to guidance from public health experts and state requirements to stay home. 

Tips on flying safely during the pandemic 04:16

"Even when the airline cancels their flights, they are having trouble getting refunds," Laitin said on the call. "Airlines are really pushing vouchers — people have to ask and call and call just for the refunds they are are legally entitled to."

The Department of Transportation on Tuesday said it has received more than 25,000 complaints about air travel in March and April, many of which about refunds. Typically, the agency receives about 1,500 per month about flying.

Passengers "are generally not entitled to a refund or a travel voucher for future use on the airline" if they have a non-refundable ticket and opted not to travel because of the pandemic, the transportation agency said.

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