Federal Maritime Commission Looks Into Cruise Line Refunds

The Federal Maritime Commission is looking into how long it’s taking for customers to get refunds for cruises cancelled by the COVID-19 pandemic.

Commissioner Louis E. Sola is suggesting that the FMC create a uniform standard and make clear how passengers may obtain refunds.

The recommendations are contained in an interim report as part of a fact-finding investigation of COVID-19 impacts on the cruise industry.

“Our analysis revealed that, for the most part, consumers are satisfied with the responses they have received from the passenger vehicle operators (PVOs) concerning the cruises cancelled due to the CDC no-sail order,” Sola said in a press release. “That said, we discovered some places where we, as a regulator, could improve our ability to protect the consumer; that is why I propose amending the commission’s rules related to non-performance and refunds.”

Sola’s interim report said the commission’s Office of Consumer Affairs and Dispute Resolution Services (CADRS) received 418 calls about cruise companies from February to July 14, 2020. “A significant number of these have been about PVOs refusing or failing to issue a refund in part or full, refusing or failing to issue credit in part or full, and delay or difficulty in obtaining a refund,” the report says. “Calls about delay or difficulty in obtaining a refund did not begin until April. It should be stated that not all calls received gave rise to a formal complaint being filed against a PVO. In many cases, the consumer elected to resolve their dispute in another fashion.”

The FMC also received complaints from people who said their refunds were taking longer than 60 or 90 days. The FMC asked cruise companies about the refund process, several lines pointed out two major obstacles—a significant increase in the volume of refund requests and stay-at-home orders affecting employees processing requests.

The commission will vote on whether to initiate make the changes proposed by Sola. A vote is expected by mid-August.

Sola’s specific proposals are:

—When a sailing is cancelled or passenger boarding is delayed by at least 24 hours due to any reason other than a governmental order or declaration, full refunds must be paid within 60 days following a passenger refund request.

—When a sailing is cancelled or consumer boarding is delayed due to a governmental order or declaration, full refunds must be paid within 180 days following a passenger refund request.

—If, following a declaration of a public health emergency, any consumer cancels a cruise booking of a sailing that may be affected by such emergency after the PVO’s refund deadline, but the sailing is not cancelled, the PVO will provide a credit for a future cruise equal to the consumer’s amount of deposit. In all other cases in which a consumer cancels and embarkation and sailing occur within the prescribed timeline, the cruise line’s rules for cancellation will apply.

—A PVO may set a reasonable deadline for a consumer entitled to a refund to request the refund which shall not be less than 6 months after the scheduled voyage.

—Refunds should include all fees paid to the PVO by consumer to include all ancillary fees remitted to the carrier by the consumer.

—Refunds to be given in same fashion as monies were originally remitted to the carrier.

Sola said the proposed rule change is intended to both protect the consumer and provide clear uniform standards that the cruise companies can rely upon when making business decisions. These proposed changes do not prevent the consumer and the cruise lines from entering into an alternative form of compensation in full satisfaction of a required refund.

“This proposal benefits both the consumer and the industry, it is a product that everyone affected can and should embrace,” Sola said.

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