ARC Promises It ‘Will Not Hold Travel Agencies Liable’ for Debit Memos

In a message to its travel agency clients on Tuesday, Airlines Reporting Corporation (ARC), after significant pressure from ASTA and the travel agency community, announced interim changes to its debit memo and chargeback policies.

The changes, ARC says, will help agencies “more easily manage debit memos and chargebacks through this challenging period” and include ARC not holding travel agencies liable for any memos.

ARC said, in the message, that it will take no action on debit memos that involved a flight canceled “by an airline or government entity as a result of COVID-19” nor will it take action on memos that are “related to a passenger compensation dispute resulting from COVID-19.”  

“ARC will not hold travel agencies liable for the payment of such memos, nor will ARC take any action against agencies that could affect their accreditation status for failure to do so,” the letter reads.

Any advisor that receives a debit memo from ARC will be able to dispute the memo within ARC under a new code.

ARC also announced that it has extended its Ticket Resolution Services (TRS) compensatory fee grace period from 15 to 45 days for new debit memos loaded starting April 9. By doing that, ARC says, agencies and airlines will be able to more easily resolve open debit memos.

Lastly, ARC said it has suspended its ARC Pay chargeback fee until further notice to “help our travel agency customer better manage the costs associated with the rapid increase in chargebacks resulting from the COVID-19 pandemic.”

The issue of chargebacks, a problem for agencies long before COVID-19 brought travel to a standstill worldwide, has been the focus of ASTA recently as more and more travel advisor clients dispute credit card charges from airlines who weren’t issuing refunds, or issuing them timely, during the COVID-19 disruption period.

Last week, ASTA CEO Zane Kerby told TMR that it was making progress on finding some sort of solution for advisors being stuck with debit memos because consumers disputed a credit card charge after getting denied a refund from an airline.

“Our travel advisors should not be responsible for the cancellation policies or what a consumer does in reaching out to the credit card company,” he said. “Those are things we can’t control and we are being held responsible for it.”

Kerby said ASTA has spoken to three out of the four parties involved in those transactions—advisors, airlines, and ARC—but has not yet been able to communicate with credit cards companies. He does expect ASTA to make some progress on a solution that would spare advisors some pain.

“I’m confident a fair minded solution in removing travel advisors from the responsibility is in the works and will be revealed,” he said.

In a statement reacting to the news, ASTA applauded the decision. 

“ARC not taking action on debit memos that involve flights canceled by an airline or government, or debit memos that are related to a passenger compensation dispute – either resulting from COVID-19 – is exceptional. By not holding travel agencies liable for the payment of such memos, nor taking action against agencies that could affect their accreditation status for failure to do so, is a strong testament to the value and trust placed in the travel agency community by ARC and its owner airlines.”