DOT Gets Tough on Airfare Ad Rule

A hefty fine against Travelocity for violating an airfare display rule shows that the Department of Transportation is getting serious on rule enforcement, industry attorney Alexander Anolik told Travel Market Report.

DOT is keeping a close watch on small travel agencies as well as large ones, he said.

Travelocity fined
DOT this week announced that it fined online travel agency Travelocity $180,000 for violating the rule on full-fare advertising that went into effect last January. Travelocity failed to include fuel surcharges and other fees in advertised airfares, DOT said.

Under its price advertising rule, “carriers and ticket agents must show the total price, including all government taxes and fees, in every advertised fare. The rules apply to travel agents as well as airlines,” DOT said in a statement announcing the Travelocity fine.

(DOT also includes tour operators under its definition of travel agents.)

DOT means business
Anolik predicted that the Transportation Department “is going to go into high gear, because they are nitpicking.”

Anolik’s San Francisco-based firm has recently been asked by “a major OTA and a small little home-based travel agent working off her kitchen table” for defense against DOT fines, he said.

While DOT’s Travelocity fine resulted from an investigation before the Jan. 26 rule went into effect, Anolik said the fine is part of the department’s effort to put the industry on notice that it means business about the new rule.

“I believe that the DOT has held off for the past six months to give agencies and carriers a window to get into compliance.  It looks like the DOT is now stepping up enforcement and handing over bigger penalties to make up for lost time,” he added.

“We are representing multiple clients with pending investigations for violations of the rule. The DOT is looking to make public examples of violators and has proposed six-figure penalties.”

Church bulletin not exempt
Besides that “kitchen table” agent, Anolik’s San Francisco law firm, Anolik Law Corporation, is handling a case for an agent over a DOT airfare disclosure infraction stemming from her advertisement in a church bulletin.

Enforcement, said Anolik, “will increase and do not think that because you do work off the kitchen table or you think you have eleemosynary protection for advertising in the church bulletin that the DOT is not watching.”

It is.

Anolik believes that DOT bureaucrats are dropping the dime on their neighbors as in the case of the church bulletin agent. DOT shoppers also buy local newspapers to scour travel advertising for airfare disclosure violations – a tactic that it uses in going after ethnic agencies that are very price-competitive.

Going after tour operators
The DOT is also starting to go after tour operators on the price disclosure rule, according to Anolik. Tour operators typically included travel insurance in their pricing, but under that Jan. 26 rule, insurance must be an opt-in product, not opt-out.

“There are still tour operators doing the opt-out and now that in itself is a violation,” said Anolik.

Not business as usual
“The essence of the Jan. 26 rule is that this is not business as usual,” said Anolik, noting that the rule provides the transportation department with more statutory authority to say “it is does not fit into this square…if it doesn’t, you are fined $27,500 per infraction.”

His advice to travel agencies: “The feds need money and therefore do not think you are too small or too large.”