In late March, OJ Sidor and his wife got the same news many other Canadians received around that time: their springtime vacation was cancelled because of COVID-19.
But for Ajax, Ont.-based Sidor, there seemed to be a big silver lining. While their longed-for trip to San Jose del Cabo, Mexico was off, their airline, Sunwing, would provide a full cash refund, the couple were told.
“This is wonderful,” Sidor remembers he and his wife telling each other. “That was easy.”
But nearly four months and countless emails and phone calls later, the couple are still trying to recoup the full cost of a $4,730 trip that never was.
Sunwing now says it has no obligation to provide a full refund, even though its pre-pandemic policy was to offer customers a choice between a 12-month voucher and a cash reimbursement.
And while one of the couple’s two Mastercard credit cards has approved their chargeback request, the other has denied the claim.
Sidor’s experience is an example of the drawn-out, messy battles facing Canadian travellers who want their money back instead of rebookings or travel credit.
‘We adjusted our policy’
The trip to Mexico was to be Sidor’s 50th birthday celebration, he told Global News. But on March 19, just weeks before their scheduled departure on April 9, he says he and his wife received a phone call from their travel agency, TripCentral, informing them that Sunwing had cancelled their southbound flight due to the novel coronavirus pandemic.
The same day, TripCentral emailed them an invoice for a refund of $4,380 — which covered most of the trip’s cost, with the exception of cancellation insurance and other fees.
While the couple wanted reimbursement for 100 per cent of the costs, knowing that at least most of the expenses would be refunded was a relief, Sidor says.
“Great,” Sidor says he thought to himself. “Move on — we’ll book the trip later.”
But a few days after, Sidor was told that instead of a refund he would get a travel voucher valid for 24 months.
TripCentral says it was initially told by Sunwing that the couple would get a refund.
“Our understanding is the credit card refund batch was halted by Sunwing after business hours and not processed,” TripCentral president Richard Vanderlubbe said via email.
In a statement to Global News, Sunwing said it quickly had to change its policy “due to the changing circumstances.”
“In line with other Canadian airlines and tour operators, as well as the guidelines published by the Canadian Transportation Agency, we adjusted our policy and offered all customers a future travel credit valid for two years,” the company said.
“We understand that some customers would have preferred a refund, but are confident that during the next two years they will be able to take the flights or vacations they had planned using the travel credits issued to them.”
Canadian airlines have been denying refunds and offering instead time-limited credit or vouchers for trips cancelled due to the pandemic, as the industry struggles with a collapse in air travel.
But consumer advocacy groups and tens of thousands of Canadians have been calling on the federal government to enforce the right to a refund for flights cancelled by the airlines themselves. Prime Minister Justin Trudeau and Transport Minister Marc Garneau have said they are looking for a solution that balances supporting passengers without compromising the future of the airline industry.
In early July, Sunwing processed a 50 per cent refund for Sidor and his wife after assessing that the couple had purchased a cancellation waiver. The remaining balance continues to be available as future travel credit, the company told Global News in a separate statement.
Sidor, however, says he isn’t interested in vouchers, which he describes as an interest-free loan to airlines. Also, if flight prices were to go up, customers would be left to cover the cost difference, Sidor reckons.
“My wife and I work really hard to do these things,” he says. “And you’re not getting our money for free.”
A tale of two Mastercards
Frustrated by Sunwing’s decision, Sidor decided in early April to request a credit card chargeback, asking that all payments related to the trip be reversed.
It’s a strategy many disgruntled passengers have used to try to get their money back even as airlines and hotels refuse to provide refunds.
Reporting by Global News has found that some customers have had success with chargebacks, with credit card issuers reversing payments for services that merchants are no longer able to provide due to the pandemic.
But Sidor’s story shows how chaotic and confusing the process can be for consumers.
Sidor and his wife used a Capital One Mastercard for the main $4,430 booking and a PC Mastercard to pay for seat selection fees and cancellation insurance, which they purchased at a later date for $300.
While PC Financial has reversed the $300 charge, Capital One has so far rejected the couple’s chargeback request because Sunwing has offered them a voucher of equal value.
Sunwing told Global News in a statement that it initially disputed both chargeback requests but later “chose to discontinue the process with PC Mastercard since the amounts were nominal.”
“While Capital One can initiate disputes on customers’ behalf, decisions about refunds and travel credits are based primarily on travel companies’ policies and terms, as we saw in this particular case and the travel credit that was ultimately provided to the customer,” the company said in an email statement.
In a letter dated June 2, Capital One provided a deadline for Sidor’s wife, who is the primary cardholder, to provide documentation, such as a copy of the purchase agreement and a refund voucher from the merchant, to support her right to a chargeback by June 23.
However, the couple say they did not receive the letter, which they say was mailed from the U.S., until July 7.
On July 16, after Global News asked Capital One whether the couple would get an opportunity to provide evidence to support their claim, Sidor says the company invited them to submit a copy of the refund invoice and communication rescinding that refund offer.
Sidor, for his part, says he is considering filing a complaint with Capital One’s ombudsman.
“I’m just astounded at the way we’ve been treated,” he says.
Sunwing had ‘an entirely different refund policy in place’
Airline passenger advocate Gabor Lukacs takes issue with the notion that Sunwing doesn’t owe the couple a refund.
“Sunwing had an entirely different refund policy in place — one that requires a refund to the passenger rather than vouchers,” says Lukacs, who is the founder of non-profit consumer advocacy group Air Passenger Rights.
The airline acknowledges it changed its policy after the onset of the pandemic in North America. But in a letter disputing Sidor’s chargeback request on the PC Mastercard, Sunwing points to Mastercard’s rules and government regulation to argue Sidor’s claim is invalid.
“As per Mastercard’s chargeback rules, neither the issuer nor the cardholder have dispute rights when a service is not provided due to a government-imposed regulation,” the document reads.
On March 13, the Canadian government issued a global travel advisory to avoid all non-essential travel, Sunwing notes in the letter. And on March 21, the Mexican government followed suit by limiting non-essential travel across its borders before introducing even more stringent curbs on travel, the company also says.
Also, on March 24 the Ontario government issued an order requiring all non-essential businesses to close indefinitely until further notice, the letter notes.
Those restrictions came into effect before Sidor’s trip was set to start on April 9.
In the letter, Sunwing also references a recent amendment to the regulations around the Travel Industry Act of Ontario, which states it’s not a regulatory offence for travel service suppliers to provide customers affected by COVID-19 cancellations with travel credit instead of reimbursement.
Lukacs, however, argues neither Mastercard’s rules nor government regulations give Sunwing the right to impose a voucher on customers in Sidor’s situation.
Lukacs points to a set of guidelines from Mastercard around chargeback disputes related to COVID-19 cancellations. The document states “there is a chargeback right when services are not provided, including when they are cancelled by a merchant due to government restrictions, insolvency or other exceptional circumstances.”
This holds, “unless the merchant has a right to provide the cardholder with reasonable alternatives based on the terms and conditions properly disclosed to the cardholder at the time of purchase, or based on applicable government legislation or regulation.”
And while Ontario has approved COVID-19 regulations giving travel-sector companies the right to opt for travel credit instead of refunds, Lukacs notes those rules only came into effect on March 30.
Sunwing made the decision to cancel its March 17 to April 9 flights on March 16, the airline has told Global News.
“You can’t apply regulations retroactively,” Lukacs says.
And Lukacs argues that the amended regulations around the Travel Industry Act of Ontario do not negate the provisions on consumer refunds laid out in the Ontario Consumer Protection Act.
Whether customers are entitled to a chargeback isn’t simply up to the credit card issuer to decide, Lukacs adds. Ontario’s Consumer Protection Act, for example, clearly outlines how credit card issuers must handle chargeback claims, he adds.
At the federal level, the Canadian Transportation Agency posted a statement on its website that reads: “While any specific situation brought before the CTA will be examined on its merits, the CTA believes that, generally speaking, an appropriate approach in the current context could be for airlines to provide affected passengers with vouchers or credits for future travel, as long as these vouchers or credits do not expire in an unreasonably short period of time (24 months would be considered reasonable in most cases).”
Later, however, the agency clarified that the statement was not a binding decision. The statement “doesn’t affect airlines’ obligations or passengers’ rights,” the agency said.
Lukacs is challenging the CTA’s statement on vouchers in the Federal Court of Appeal and is asking the courts to order the regulator to take its statement on vouchers off its website altogether, arguing it is misleading to the public.
Sidor, who says he and his wife have been loyal Sunwing customers for years, vows never to do business with the company again.
“We will do everything possible to book with anybody but Sunwing, even to the point of spending more money.”
— With a file from Anne Drewa at Global News