Are Home-Based Agents at Risk for DOT Rule Violations?

gavelCould independent home-based agents be liable for violations of Department of Transportation (DOT) rules on disclosure of code-share flights?

Recent DOT fines against major agencies - a $125,000 fine against Carlson Wagonlit Travel, a $65,000 fine against Frosch International Travel, an earlier $100,000 fine against Liberty Travel and $40,000 fines against both STA Travel and AAA Mid-Atlantic  - are a concern. This year DOT says it has now issued six fines for code-sharing violations, totaling $430,000.

RELATED: DOT Fines Carlson Wagonlit and Frosch for Code-Share Violations

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All the agency's are established, well managed leaders in their fields but face serious fines as well as DOT cease and desist orders. DOT says the amount of the fines was based on the specific circumstances of the individual cases - but they could severely impact smaller agencies if not bankrupt them. True they have often a different business mix but the DOT policy stands.

DOT says the actions  are part of an ongoing effort by DOT to ensure that ticket agents comply with the code-share disclosure rules.

RELATED: DOT Fines Travel Agents for Code-Share Violations

“No one wants to arrive to their gate and learn for the first time that the airline they thought was operating their flight actually sold them a ticket for another airline,” said U.S. Transportation Secretary Anthony Foxx. “We will continue to make sure that all companies selling air transportation are transparent with consumers and will take enforcement action when they fail to disclose code-sharing arrangements.”

Under code-sharing, an airline sells seats on flights using its designator code, but the flights are operated by a separate airline, DOT notes.

In the Carlson/Frosch cases, the DOT’s Aviation Enforcement Office made telephone calls to a number of agents during January and February of 2013 and inquired about booking certain flights. During these calls, the reservations agents for both companies failed to disclose that the flights were being operated under code-share arrangements, DOT notes. 

"The agents identified only the name of the airline marketing the flight and not the name of airline operating the flight. This violated DOT rules requiring airlines and ticket agents to inform consumers if a flight is operated under a code-share arrangement, as well as disclose the corporate name of the transporting airline and any other name under which the flight is offered to the public."

In the Liberty Travel, STA Travel and AAA Mid-Atlantic cases it is much the same - all respected, established firms. And again the DOT's Aviation Enforcement Office made telephone calls to a number of agents during  and inquired about booking certain flights. And again, DOT says, the reservations agents for all three companies failed to disclose that the flights were being operated under code-share arrangements. The agents identified only the name of the marketing airline and not the corporate name of the airline operating the flight or any other name under which the flight was marketed.

This violated DOT rules requiring airlines and ticket agents to inform consumers if a flight is operated under a code-share arrangement, as well as disclose the corporate name of the transporting airline and any other name under which the flight is offered to the public.

DOT noted that it had fined JTB USA a $60,000 penalty in May 23.

While the targets of DOT's actions to date have been larger, respected high volume agencies the smaller agent should be alert to the DOT's rules - and the severity of the fines. Seller beware!

As a home-based agent, are you worried about the DOT rules affecting you? Tell us what you think on our Facebook page or in the comments below.

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