U.S. DOT Fines Swoop for Failure to Refund Passengers
Swoop (WO) was ordered to pay US$175,000 in civil penalties for failure to refund passengers in the wake of COVID-19.
Swoop (WO) was ordered to pay US$175,000 in civil penalties for failure to refund passengers in the wake of COVID-19.
DALLAS — Canadian ULCC Swoop (WO) was ordered to pay US$175,000 in civil penalties by the U.S. Department of Transportation (DOT) for failure to refund passengers who faced canceled or significantly delayed flights in March 2020.
The fine was served on November 22, 2022, by the U.S. DOT's Office of Aviation Consumer Protection (OACP). The order consists of around 250 complaints from passengers stating that they did not receive any refunds for flights between the US and Canada that were disrupted due to the effects of COVID-19 on the travel industry.
Only customers who purchased a "refundable" ticket were able to receive funds while the airline issued travel credits to affected customers.
The OACP stated that "Swoop was unable to provide the department information regarding the length of time that it took to process the thousands of refund requests that it received directly from consumers," the department further added that "
Swoop took more than 100 days to process many of these refunds. As a result, the OACP determined that many consumers experienced significant harm from the extreme delay in receiving their refunds.
The Calgary-based carrier argued that if it didn't conserve cash out-flows, and reduce staff at the beginning of the industry shutdown, there was a possibility the carrier would experience a collapse, which would have erased "one of the very few transborder ULCCs during the global pandemic crisis."
The WestJet (WS) subsidiary decided to accept the US$175,000 fine and agreed to avoid future violations to prevent costly and time-consuming litigation in the future. Half of the fine is due within the next 30 days (US$87,500) while the other half is credited to Swoop to refund passengers who opted out of traveling and were not entitled to refunds under US law.
Other ULCCs, such as Frontier (F9), were also stamped with fines by the DOT for untimely refund processes. Here's the list of all seven carriers that were charged a fine for refund delays.
Featured image: Otto Kirchof//airways
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