When it comes to fines, the Transportation Department is on a roll. Last month saw an unprecedented number of actions against airlines for deceptive fare advertisements. And now, the government has put a cruise line in its crosshairs.
In a consent order issued late last week, the DOT fined Costa Cruise Lines $36,000 for failing to disclose fuel surcharges and taxes in its fares. (Here’s the full order as a PDF file.)
Cruise lines are one of the least-regulated travel products on the market. Thanks to flags of convenience, the companies can do more or less whatever they want. But the government says it has the authority to impose these fines.
According to the consent order:
Costa Cruise Lines, as a seller of cruise and air tour packages, is subject to the advertising requirements of Part 399 of the Department’s rules.
Under 14 CFR 399.84, any advertising that states a price for air transportation or an air tour is considered to be an unfair or deceptive practice in violation of 49 U.S.C. § 41712 unless the price stated is the entire price to be paid by the customer to the air carrier or ticket agent for such air transportation, tour or tour component.
So what did Costa do to incur the wrath of the DOT? Its listed prices for the “complete” air and cruise packages failed to include cruise-related fuel surcharges, which must be included in the advertised price, and failed to include an appropriate notice of the amount or nature of government taxes and fees that are not included in the overall air plus cruise package price, according to the government.
For example, in a search starting with an e-mail solicitation, “2-Day President’s Sales—Summer Mediterranean Cruises from $649,” the Enforcement Office researched an advertisement entitled “Italy/Greece/Croatia Costa Serena — 7 Nights President’s Sale from $649*.” The sub-head stated: “Add round-trip airfare from only $1250**.” The text immediately below described the cruise and the round-trip airfare as “by far the lowest rate for a European vacation!”
In the fine print below the body, the double asterisk is detailed:
Round Trip Air based on departures from New York (JFK) for all featured sailings. Airfare from over 150 other gateways are available at additional cost, pricing based on airline availability and may be subject to change. Price includes round trip air. Airport to pier, pier to airport transfers and overnight hotel additional. Does not include US and foreign tax and other government imposed fees.
The DOT says there was no appropriate notice on the screen or page where the cost of the overall trip was first revealed of the amount or nature of government taxes and fees that are not included in the overall cruise plus air package price.
When Enforcement Office staff examined the brochure section on the Costa Cruises web site, and clicked first on the subtitle “Air connections – More than 75 Gateway Cities To Easily Get You There and Back,” then under the subhead “Are taxes included in the Price?,” they were informed that:
[T]he prices for Air Add-ons do not include government taxes and fees imposed or sanctioned by the U.S. or other governments. These charges are in addition to the airfare quoted and may include without limitation passenger and airport facility charges, airport security fees, security surcharges, fuel surcharges, international arrival or departure taxes, customs user fees, immigration fees, agricultural inspection fees and any new taxes or charges which may be enacted after this brochure was published.
Costa Cruises promised that it would inform the passenger of any applicable charges and taxes “at the time of booking.”
This is precisely the kind of bait-and-switch nonsense many airlines are engaged in, in an apparent effort to boost their “ancillary” revenues. Waiting until the time of booking to reveal the full price is, of course, totally dishonest. The full price should be shown immediately.
The government should be applauded for taking this action, but the deception of cruise and airline passengers continues. Every day, hundreds of thousands of reservations are made under false pretenses. Travelers believe they are seeing a price that includes the ability to check a bag and reserve a seat, only to find that they must pay extra for those items.
Until these lies end, the government’s work will not be done.
(Photo: ragingwire/Flickr Creative Commons)
