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Would-be passengers get around airline refund policies via credit card chargebacks

Some customers are initiating chargebacks on their credit cards instead of taking vouchers from airlines for cancelled flights. Jonathan Hayward/The Canadian Press via AP

Lucky Paras didn’t have to live up to his name to get his money back from an airline. He just approached the problem from a different angle.

The 23-year-old University of Manitoba student had booked seats for himself and his girlfriend on a Swoop flight from Winnipeg to Las Vegas in May for a week-long trip with friends.

But in March, the airline cancelled the flight along with thousands of others as border shutdowns and quarantine rules prompted carriers around the globe to ground most of their fleet amid the COVID-19 pandemic.

READ MORE: COVID-19 refunds — What to know about credit card chargebacks

Instead of refunding his money, Swoop offered Paras a voucher, valid for two years, worth $501.38 — the total price of the round-trip tickets.

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Lucky Paras is seen in New York in an undated handout photo. THE CANADIAN PRESS/HO-Lucky Paras

“I thought it was completely unfair and a little unethical,” he said.

Paras attempted to reach Swoop for a refund but said he couldn’t get through on the phone and didn’t receive a response to a Facebook Messenger note for two weeks. So he found another way to reclaim his money.

READ MORE: Booking or changing a flight? Here are the rules for major Canadian airlines

Paras initiated a chargeback through his Visa card provider, phoning Toronto-Dominion Bank and filing a dispute on March 31. On May 19, he got his money back.

“It’s definitely a relief off my shoulders,” he said, noting his part-time job at Bell MTS Place, home of the Winnipeg Jets, vanished after confinement measures set in.

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‘The burden of proof is now on the carrier’

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A customer can launch a plausible dispute if the carrier has cancelled a flight but not if the passenger did so, said passenger rights advocate Gabor Lukacs. But before initiating a chargeback, consumers should request a refund directly from the ticket seller — via telephone, email, social media or all three.

READ MORE: Air Canada gives customers more options for cancelled flights amid coronavirus pandemic

If a response doesn’t come within 15 days or is rebuffed, customers can call the payment card issuer and request a chargeback on the grounds that services they paid for were not rendered.

“The burden of proof is now on the carrier,” Lukacs said.

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He recommends asking for a dispute adviser or an agent with a similar title in the credit card department. Clients should insist on a chargeback process even if the bank suggests the matter is between them and the airline or that the tickets were non-refundable — an irrelevant point, Lukacs said.

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“You need to be really very, very assertive.”

READ MORE: ‘People are livid’ — Advocates call on feds to make airlines give refunds amid COVID-19

Credit cards spell out consumer rights in documents online.

“There is a chargeback right when services are not provided, including when they are cancelled by emergency due to government restrictions, insolvency or other exceptional circumstances,” according to an online guide to dispute resolution Mastercard posted on May 1.

Document, record calls

Customers should be prepared with documents that show proof the flight was cancelled — usually an email from the airline, but a public statement announcing a swathe of cancellations could also suffice — and the date and amount of the credit card charge, Lukacs said.

“There is some variation between the various credit cards,” he noted. “And there are very few cases that have been decided with finality so far.

“Overall, of course the banks don’t want to hold the bag for the airlines, either. That may be a motivation for some Canadian credit card issuers to be less co-operative than others.”

READ MORE: No physical distancing needed on flights, but ban washroom lineups — airline trade group

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Lukacs suggested clients record their calls with airlines and financial institutions for possible later reference.

Those faced with a refund denial by a Canadian airline can also complain to the U.S. Department of Justice, which requires any airline that cancelled flights in or out of the country to offer passengers a refund.

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Trip cancellation insurance may be less reliable.

“I tried my private cancellation insurance, and they denied the claim on the basis of the vouchers,” said Air Transat customer Cathi Gibson-Gates. So she sought a chargeback from the Royal Bank of Canada on her Visa payment and received it last month. The airline has 10 weeks to dispute the repayment.

READ MORE: Travel will never be the same, thanks to COVID-19

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“I really feel like I was being robbed by the airlines,” she said.

Back in Winnipeg, Paras agreed.

“It just doesn’t make sense for us as consumers to be forced to travel as opposed to keeping that cash, because during these unprecedented times we’re definitely going to need this money for basic necessities,” he said.

“We don’t even know when we’re going to be able to travel next.”

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