Letter Decision No. 98-C-A-2022
APPLICATION by Joel Goldberg and Louise Déry-Goldberg (applicants) against Air Canada (respondent), pursuant to subsection 110(4) of the Air Transportation Regulations, SOR/88-58 (ATR), concerning a refund.
[1] The applicants were originally scheduled to travel from Montréal, Quebec, to Fort Lauderdale, Florida, on November 19, 2019. The respondent cancelled the flight. It refunded the Bank of America USD Visa Debit Card (BOA Visa) used to purchase the tickets, even though the applicants told it that they had closed this account and asked it to refund a different USD Visa Debit Card account instead.
[2] The applicants submit that they have not received the refunds for the cancelled flight. They each seek a refund of USD 211.96, as well as interest that has accrued on the refund amounts. They ask that the refunds be settled to their TD Canada Trust USD Visa Debit Card or in the form of a cheque.
PRELIMINARY MATTERS
[3] The respondent requests that the application be dismissed under section 42 of the Rules.Note 1 It argues that it cannot be held liable for damages as a result of the internal policies and procedures of the applicants’ credit card issuer. It claims that the applicants have already been refunded for their tickets and that their claim is moot.
[4] While the Canadian Transportation Agency (Agency) does not have jurisdiction over a matter between a credit card issuer and its customers, it does have the authority to determine whether the respondent properly applied its TariffNote 2 in refunding the applicants. As this issue has not been decided, the Agency denies the respondent’s request.
[5] The respondent also asked to place additional comments on the record of this proceeding, pursuant to section 34 of the Rules. It submits that the applicants explicitly accepted its terms and conditions of carriage, as set out in its Tariff, when they booked their tickets on its website; and that it respected Rule 100(C) of its Tariff when it refunded the applicants’ BOA Visa account, the original method of payment used to purchase their tickets.
[6] The Agency finds that the information is relevant to the case. Therefore, the Agency accepts the respondent’s request and places its email, dated March 10, 2022, on the record of these proceedings.
REFUND
[7] The applicants claim that the respondent knowingly made refunds to their closed Debit Card account and that they have not received the refunds to which they are entitled. They state that BOA Visa informed them that any refund payments made to their closed account would be returned to the respondent. The applicants contacted the respondent to indicate that they had not received the refund to the closed account and requested that the refund be reissued to their TD Canada Trust USD Debit Card. Their request was denied.
[8] The respondent argues that it refunded the BOA Visa account, the original method of payment that the applicants used to purchase the tickets, in accordance with Rule 100(C) of its Tariff, specifically Exception 2 of that rule. It claims that BOA Visa never returned the refunds. In support of its position, the respondent provided a signed statement from its Lead Intermediate Finance Agent stating that two refunds in the amount of USD 211.96 were remitted to a BOA Visa account ending in 0018 and that BOA Visa never returned these funds to it.
[9] The respondent states that it provided the applicants with an acquirer reference number (ARN)Note 3 to track their refunds with BOA Visa. It filed an accounting report indicating that the original credit card account number (ending in 0018) used to purchase and refund the tickets; the date of the refunds; the currency and amounts; and the ARN correlate with the refunds that were processed by the respondent for both tickets.
[10] The applicants submit that BOA Visa searched for the ARN but was unable to locate the transaction. In support of their position, the applicants provided a letter from BOA Visa dated April 7, 2021.
[11] The letter indicates that BOA Visa cannot find a refund of USD 432 on an account ending in 2208. The Agency finds that this letter does not support the applicants’ assertion that the refund amount cannot be found. The account details provided in the BOA Visa letter do not correspond with the account number originally used to purchase the tickets or the amounts that are subject of this complaint, specifically the Visa account ending in 0018 and the two refunds in the amount of USD 211.96. Nor does it indicate that BOA Visa cannot track the refunds associated with the ARN provided by the respondent.
[12] The Agency finds that, on a balance of probabilities, the evidence supports the respondent’s claim that the funds were refunded to the BOA Visa account and does not show that BOA Visa returned the funds to the respondent. Consequently, the Agency finds that the applicants have not shown that the respondent failed to properly apply the terms and conditions of carriage set out in Rule 100(C) of the Tariff and dismisses the application.
DIRECTION TO SHOW CAUSE
[13] Although the applicants did not raise the issue of reasonableness of the respondent’s Tariff in their application, the Agency is of the preliminary opinion that Exception 2 of Rule 100(C) of the current Tariff is unjust and unreasonable, and that it is more restrictive than the refund obligations set out under subsection 17(7) of the Air Passenger Protection Regulations (APPR).Note 4 This provision of the APPR came into effect on December 15, 2019, after the applicants’ flight was cancelled, and therefore does not apply to the applicants’ complaint. The relevant provisions of the ATR, APPR, Rules and current Tariff are set out in the Appendix.
[14] Exception 2 of Rule 100(C) states that for tickets purchased by a credit card honoured by the respondent, refunds can only be made to the account of the person to whom the credit card was issued.
[15] Subsection 17(7) of the APPR only requires that refunds be paid by the method used for the original payment and to the person who purchased the ticket. The APPR does not restrict refunds to a specific account of the method used to purchase the ticket.
[16] In this case, the evidence shows that the applicants informed the respondent in the early stages of the refund process that their original USD Visa Debit Card account was closed and asked that the refund be credited to a different USD Visa Debit Card account. However, the respondent’s rigid application of Exception 2 of Rule 100(C) prevented the applicants from receiving their refund in the active account of the original method of payment used to purchase the tickets, and has caused them great frustration and inconvenience.
[17] The respondent, in an email to the applicants, dated August 5, 2020, recognized that it is common for credit card or bank accounts to be closed and stated that, where a refund is made to a closed account, the passenger must arrange with their credit card company or bank to have the refund issued to another form of payment. The respondent stated that it had to refund the closed account due to its agreements with credit card companies, a claim that appears to be contradicted by Visa’s merchant support documents cited by the applicants.
[18] The Agency is of the preliminary view that Exception 2 of Rule 100(C) is unjust and unreasonable, as it provides no alternate refund options to passengers whose credit card account is closed.
[19] The Agency is also of the preliminary view that Exception 2 of Rule 100(C) creates a disadvantage to passengers who purchase their tickets by credit card, as these passengers may face hurdles in their pursuit to recover their refunds—as the facts of this case illustrate.
[20] In light of the foregoing, the Agency is of the preliminary opinion that Exception 2 of Rule 100(C) does not strike a balance between the rights of the passengers to be subject to reasonable terms and conditions of carriage and the respondent’s statutory, commercial and operational obligations. Accordingly, the Agency finds, on a preliminary basis, that Exception 2 of Rule 100(C) is unjust and unreasonable within the meaning of subsection 111(1) of the ATR.
[21] The Agency provides the respondent with the opportunity to show cause, by September 12, 2022, why the Agency should not make an order, pursuant to section 113 of the ATR, to disallow Exception 2 of Rule 100(C) of the Tariff.
APPENDIX TO DECISION NO. 98-C-A-2022
Air Transportation Regulations, SOR/88-58
110(4) Where a tariff is filed containing the date of publication and the effective date and is consistent with these Regulations and any orders of the Agency, the tolls and terms and conditions of carriage in the tariff shall, unless they are rejected, disallowed or suspended by the Agency or unless they are replaced by a new tariff, take effect on the date stated in the tariff, and the air carrier shall on and after that date charge the tolls and apply the terms and conditions of carriage specified in the tariff.
111(1) All tolls and terms and conditions of carriage, including free and reduced rate transportation, that are established by an air carrier shall be just and reasonable and shall, under substantially similar circumstances and conditions and with respect to all traffic of the same description, be applied equally to all that traffic.
113 The Agency may
(a) suspend any tariff or portion of a tariff that appears not to conform with subsections 110(3) to (5) or section 111 or 112, or disallow any
tariff or portion of a tariff that does not conform with any of those provisions; and
(b) establish and substitute another tariff or portion thereof for any tariff or portion thereof disallowed under paragraph (a).
113.1(1) If an air carrier that offers an international service fails to apply the fares, rates, charges or terms and conditions of carriage set out in the tariff that applies to that service, the Agency may, if it receives a written complaint, direct the air carrier to
(a) take the corrective measures that the Agency considers appropriate; and
(b) pay compensation for any expense incurred by a person adversely affected by its failure to apply the fares, rates, charges or terms and
conditions that are applicable to the service it offers and that were set out in the tariff.
Air Passenger Protection Regulations, SOR/2019-150
Alternate arrangements — within carrier’s control
17(1) If paragraph 11(3)(c), (4)(c) or (5)(c) or 12(2)(c), (3)(c) or (4)(c) applies to a carrier, it must provide the following alternate travel arrangements free of charge to ensure that passengers complete their itinerary as soon as feasible:
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Method used for refund
(7) Refunds under this section must be paid by the method used for the original payment and to the person who purchased the ticket or additional service.
Canadian Transportation Agency Rules (Dispute Proceedings and Certain Rules Applicable to All Proceedings), SOR/2014-104
Request to File Document Whose Filing is not Otherwise Provided for in Rules
Filing
34(1) A person may file a request to file a document whose filing is not otherwise provided for in these Rules. The request must include the information referred to in Schedule 13 and a copy of the document that the person proposes to file.
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Agency’s decision
(5) The Agency may
(a) deny the request; or
(b) approve the request and, if pleadings are closed and if the Agency considers it just and reasonable to do so, reopen pleadings to provide
the other parties with an opportunity to comment on the document.
Notice of intention to dismiss application
42(1) The Agency may, by notice to the applicant and before considering the issues raised in the application, require that the applicant justify why the Agency should not dismiss the application if the Agency is of the preliminary view that
(a) the Agency does not have jurisdiction over the subject matter of the application;
(b) the dispute proceeding would constitute an abuse of process; or
(c) the application contains a fundamental defect.
International Passenger Rules and Fares Tariff AC-2 Containing Local and Joint Rules, Regulations, Fares and Charges on Behalf of Air Canada Applicable to the Transportation of Passengers and Baggage Between Points in Canada/USA and Points in Areas 1/2/3 and Between the USA and Canada, NTA(A) 458
RULE 100 – REFUND
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(C) PERSON TO WHOM REFUND IS MADE
Except as provided below or as required by applicable local rules, Air Canada will refund in accordance with this rule only to the person named as the passenger on the ticket in the original form of payment used to make the booking.
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EXCEPTION 2: Tickets issued against a credit card honored by AC will be refunded only to the account of the person to whom such credit card was issued.
Member(s)
- Date modified: