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US Air’s Consumer Fraud, or Yet Another Reminder Why We Need Regulation

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As you might know, since I gave a wee plug, I was on a panel at The Atlantic’s Economy Summit on Wednesday. Even though NC readers know much Rubinite/Hamilton Project thinking dominates the Democratic party, it was a bit surreal to see how many of its core assumptions were pretty much unquestioned, such as the belief that Bernanke did a great job in the crisis (more on that in later posts) or that regulation needed to be done judiciously if it was to be done at all (note I was on the panel that had the most people urging bolder action, but the day was dominated by “pragmatists”.)

As an aside, the part of the day I found most cringe-making was when Obama budget director Gene Sperling sold the notion awfully hard that the incoming President should be applauded getting a $800+ billion stimulus package passed shortly after coming into office, even though it was widely seen as the time as being too smal,l and was generally not given anywhere near the credit he deserved for all the great stuff he had done. It was also creepy hearing him talk about infrastructure and other initiatives that would generate middle class jobs. It took me a while to put my finger on what bothered me, and I finally realize when he was talking about middle class, he didn’t see himself as one of Those People. But I did skip both the panels with Peter Schiff and the session with prince of darkness Bob Rubin, so there were likely even more grotesqueries. (I’ll be talking a bit more about the conference over the coming days).

One theme, although it was not taken up that often, was that the US needed more innovation, and that means we need less regulation. There’s no evidence for that belief; in fact the first time business tried that line in lobbying (the 1970s) they had could not even muster any proof. Despite their assertions, the US had no innovation gap; it was well ahead of other countries in patent generation and the number of issued patents had risen strongly in recent years. Moreover, many innovations result from regulation: start with those developed to produce more fuel efficient and cleaner cars. Further, companies have been having record profits and are buying back stock (for the most part) rather than investing, so you certainly can’t try arguing that regulating is hurting profits and therefore leaving companies capital starved.

Needless to say, I’m not keen about the “let markets take care of themselves” view based on how well it worked out in the financial services industry. And I got another reminder on my return flight from Washington.

Forgive a bit of necessary background. The Atlantic said it would pay for business class travel. I thought that was a bit de trop on the shuttle. But when I went to book at Delta (one of my preferred carriers), I couldn’t see how to book a flexible time ticket, and I wasn’t keen about calling reservations and then having the call kicked over to Web support (I was tired and needed to get this done as quickly as I could). I recall US Air was explicit about flexible versus non-flexible tickets, so I went to their site.

This is the sort of page I got:

.

Then I started feeling like I should try to help the Atlantic. Big mistake. I thought, “Well, I do know when I want to leave, and if I fly first at a set time on the outbound, it’s cheaper than the flexible ticket on the outbound, plus that way I can hang my garment bag in their coat closet.” So I picked a first non-refundable on the outbound and a flexible coach on the return.

So when I booked the first leg, this is the sort of page I got in booking the return:

Notice the price of coach flexible is the same as on the return leg after picking the non-refundable seat on the outbound as if I picked a refundable seat. You can try it yourself at the US Air site to verify.

I bought the ticket and got a receipt window that says the ticket is non-refundable. I immediately called US Air in a panic. I gave the agent my record locator and she reassured me that the ticket I bought indeed is for a set time outbound and a flexible return, and I can change the time on my return ticket.

But when I got to US Air early enough to get on a flight one hour earlier than my scheduled departure, I was told by the special services person that my ticket was non refundable and I have to pay $54.25 if I want to get on the next flight. I told her my return was flexible and I’d even reviewed that issue with the reservations after I had purchased my ticket. She said she couldn’t do anything. I made her get her supervisor and got the same answer after a longer and more heated conversation.

I then called US Air reservations. I told the agent my problem. She pulled up my record, confirmed I had a flexible return ticket and I should be able to move up my flight with no charge. She got a supervisor who confirmed the same thing. By that time, I had walked back to the special services desk and tried handing my phone to the agent (a different one, the other two had gone off duty but he had heard the earlier discussion). He refused, claiming it was against policy, gave me his number and made the supervisor call him. He picked the phone. She said something short to him. He said it was a non-refundable ticket and hung up. He then told me the supervisor had told him to tell me to back down. Aside from the fact that she had told me the opposite, I find it implausible that she’d go to the trouble to have him tell me that rather than tell me that herself.

So I called reservations again. I got another agent who said the same thing as the first agent, that I should be able to move up the ticket with no charge and she had no explanation as to why I was having trouble at the gate. By now, they were shutting the door to the jet bridge. I got a supervisor again and as before recited my entire story from the beginning. This time I was told that my buying a non-refundable first leg imposed restrictions on the second leg. I said it showed no such thing on the website and I had clicked around to find out what flexible fare meant and couldn’t find any information (true, the description was so general as to be useless, and was the same on each of the two screens above, before and after choosing the non-refundable first leg). She said I could have called US Air for more information and also could have called to void the ticket when it showed on my receipt as non-refundable. I told her a second time I had called US Air right after buying the ticket (I even have phone records to confirm it) and was told then I could change the return with no upcharge.

So get this level of bait and switch: not only does the site contain this snare and provide completely inadequate disclosure (making it worse than microtype in bank credit card agreements), but I spoke to three separate agents, all of whom confirmed the intuitive understanding you’d have from buying a ticket on the site, and one supervisor (I have no idea what went on with the supervisor who told me one thing and the gate agent who said she’d said the opposite). Who would ever ask to speak to a supervisor when booking a ticket to double check that the front line staff is giving you the right story?

This is consumer fraud, pure and simple. They rely on the fact that they have your money, most people resign themselves to abuse, and it’s pretty impossible to get them to disgorge it (although I’m still going to have a go with my credit card issuer, since they will allow me to dispute part of a payment and I can show I called US Air right after I bought the ticket).

I’m never flying US Air. They have a crappy customer satisfaction record and they fully deserve it. I warn you if you have a weak moment as I did, don’t succumb. Don’t use them.

But again, this is a reminder of a much bigger issue: many big companies find it profitable not to play fair, particularly after banks have demonstrated how far you can push the envelope of consumer chicanery and get away with it. That means we need some sort of mechanism to remedy the power imbalance. As much as it became popular to decry class action lawyers, since they too often seemed to get very big paydays on the back of nickel and dime abuses, the very fact that they could get big paydays meant they had incentives to go after them and it did help more than a bit to keep companies in line (the fact that they’ve funded an aggressive lobbying/PR/pack the court effort against class action lawyers speaks volumes as to how much they were feared). So having neutered on watchdog of sorts, we can either try to strengthen others or resign or resign ourselves to continued pilfering.

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100 comments

  1. Clive

    Sorry to read about your trials and tribulations Yves. While firmly in the “misery loves company” response, be grateful you’ve never been at the mercy of the sort of “no frills” (oh — the irony, you don’t get mediocrity let alone frills) carriers which are allowed to scam (oh, appologies, I meant to write “operate”) here in the UK.

    Yes, every so often the regulators make token gestures at reigning in the worst of their abuses (like trying to introduce a wheelchair surcharge — I kid you not). But sooner or later you get their loby groups spouting some piffle about “not interfering with the market”.

    As you say, once they have your money and you’re at the airport…

    1. CJ

      Please Everyone…

      Buy the book ‘Gotcha Capitalism’ (only $13.00 new – less used) from Amazon or somewhere…

      This book explains ‘EXACTLY’ why and how companies are ripping off their customers and why it IS profitiable in the long run for them to do so… to compete…

      The big companies ATT, Comcast, Airlines, etc… also HIRE psychologists to tell them HOW FAR they can push their customers and INCREASE their profits…

      The only way you can deal with them is to fight back personally… Call them… again and again… you have to go in assuming you are going to get manipulated… you have to be mentally ready… You CANNOT be tired when you are dealing with them…

      I have gotten back tons of money from Comcast where other subscibers just ATE it… ditto with other companies…

      This book is worht its weight in Silver – :o)

      Cj…

      1. F. Beard

        I despise and hate any company that screws me to the limit and expects to get away with it. I no longer watch broadcast or cable TV AT ALL because of the damn commercials. The few TV programs I watch, I watch via the Internet or Netflix.

        I have a long memory for being deliberately exploited. I still will NEVER buy an American car because of “Planned Obsolence”. And I have a long memory for companies that treat me right too.

        Another example: Verizon makes it difficult to cancel service so WHEN I do manage to cancel you can be sure I will never wish to sign up for Verizon again.

        Short sighted ninnies!

        1. Lambert Strether

          Purge your life of rents to the maximum extent possible. That’s good because it hurts the rentiers, but it’s also good because it makes you healthier. This goes for food, and it certainly certainly goes for the teebee, because TV is a public health hazard.

        2. just me

          I will NEVER buy another HP product since their customer service wiped my laptop to fix a key face that had popped off, and then provided no support when the backup (done with the Microsoft software the laptop was sold with) failed to restore. “You call Microsoft, you pay.” Fail on top of fail on top of fail, all wrapped up in a box of fail that you cannot escape from. Not their problem.

    2. James Sterling

      “no frills” carriers

      As the
      Fascinating Aida
      song goes:

      Cheap flights, cheap flights, it’s obvious to see
      That only feckin’ gobshites think there’s flights for fifty pee

  2. jake chase

    Gosh, you got a seat at The Atlantic’s Economy Summit! Bet you heard a lot of stimulating suggestions from assembled notables. Can’t wait to hear about them.

    1. Christophe

      The predictability of your responses renders them rather redundant. Have a little more respect for Yves’ readers; we are not as easily influenced as you seem to imagine

  3. psychohistorian

    This is just another example of where the narratives are wrong.

    The myopic focus on making a buck rather than competing on providing the best “product” they can with the resources they have is similar to the disconnect we seem to have with our system of governance.

    There was this dream of democratic governance that it was to be by and for the people, kinda like the original motto of the US, E Pluribus Unum, or Out of Many, One. The reality these days seems to be that our motto is to have faith in God that our disintegrating social safety net and increasingly repressive government is our just deserts for working so hard instead of concern for the jackboot of the global inherited rich on our collective neck forever.

    1. Art Eclectic

      Exactly. Market myopia. The airlines have forgotten that they are in the transportation business and they’re making huge mistakes thinking they are in the airline business.

      I had a similar experience with Delta a few years agao and won’t travel with them again. In fact, I’ve actually almost completely stopped air travel altogether because the whole experence has become so unpleasant. At this point, there is not a single good element to getting from point A to point B via airplane.

  4. Max424

    Yves, you should’ve taken the DC/Big Apple Bullet. The B-train always leaves on schedule (thanks Fascism!), it’s blazing fast, and it’s pretty cheap,* too.

    It would’ve saved you a lot time and hassle; and let’s face it, it is the accrued stress of these niggling events that ultimately gets us in the eh…. what? … are you kidding me? …

    I have just been informed that there are no bullet trains between DC and New York, or any trains of even moderately quick speeds; anywhere in this vast country of ours.

    How can this be? Are we not the richest and most powerful nation God has ever looked upon? And I demand to know; what good is our particular brand of Fascism, if it can’t efficiently handle our routine transportation needs?

    Where is that buffoon, Benito Mussolini? We need him!

    *Even cheaper if you use cash, as you get a 20% discount!

    1. Yves Smith Post author

      I’ve done the train to DC and I don’t like it. It’s a longer and less certain time to get to Penn Station that to LGA, and the seats are even less comfortable than on planes, which is hard to do. And the total trip time is longer too.

      1. GregR

        Granted I’m sitting in the cheap seats, but from here it appears as if Max424′s toungue is firmly planted in his cheek.

      2. Lambert Strether

        The seats on the old Northeast Regional cars are far more comfortable than the Acela. Perhaps bad seats are there as a marketing ploy, to make people think they’re flying?

        I’m sure Yves caught the Mussolini reference, but… SUPERTRAINS!

        1. aletheia33

          so glad to discover i’m not missing out by not being able to afford the acela. it’s been a longtime fantasy of mine that a fairy will appear and grant me a round trip ticket on it. new haven-dc. now i can relax and forget about it.

          but then i’m a lover of train trips and other old-fashioned things, like that quaint element of doing business people used to call customer service. but maybe that was just a perk of an affluent era that we will now learn to forget, as we gradually descend toward our natural state of eating one another for breakfast. fortunately we have the invisible hand to do the cooking for us.

      1. Max424

        Fair enough. No more Mussolini and the “trains on time” bullcrap.

        Ok, who’s trains traditionally run on time. Traditionally, as in, three straight generations of excellence in the rail –and light-rail!– transportation category.

        Is it the French? The Brits? The Germans? Ah…the Japanese…

        Definitely in the running. So, we have a Benito-inspired state vying for the title. Japan is a mostly Fascist country, I think most would agree, and their trains and subways are very good, and have been for some thirty odd years, oh so I hear.

        Although, Fascist Japan has had their ooooops moment, haven’t they? Fukushima, the over reliance on nukes, four or five China syndrome meltthrus … and the abandonment of the main island not a remote possibility as a result.

        The dummies. Is any such thing as successful Fascism, in the short run, let alone the long run?

        1. PQuincy

          You will not be surprised that Swiss trains run on time. They slipped badly from the late 1990s to about 2005, so that trains departed as much as three or four minutes late on a regular basis…and even stopped broadcasting apologies for that. But they’ve gotten their act back together pretty well, and a delay of more than a minute seems no longer common, based on my last few visits.

  5. AH

    Sounds like what they did is already illegal. I don’t see how more regulation would be beneficial here. Are you saying that we should return to the CAB era, when AirCal and PSA were offering “unregulated” intra-California flights at a fraction of the cost of a regulated Boston to D.C. flight?

    Also, this might sound nitpicky, but US Airways hasn’t been US Air since 1997.

      1. Christophe

        And we old timers thank you for that. If MetLife wants to claim a new building as a landmark, they will have to relinquish the old one first. New York is chaotic enough without friends at Madison Square and Grand Central blaming each other for not showing up.

    1. Nick

      Go to the airport. Get on the plane without a ticket. A beautiful woman stewardess with a hot pink mini-skirt takes a twenty dollar bill from you and hands you a ticket and a soft drink after the plane has taken off. Those were the good old days in California.

  6. Thomas

    They’re not the only ones that are truly awful. Don’t forget that United breaks guitars (http://youtu.be/5YGc4zOqozo), or in my case bicycles. And that is after their website was very vague about bike carriage charges when I looked up the cost; it just said pay at the airport. It was a bit of a shock to discover it would cost $400! I’d only paid £400 for the flight. You can’t filter for luggage surcharges on Skyscanner, so that’s how they’re making money these days.

  7. shane536

    Re : Bullet Trains.

    I live in Japan and the advantages of having a bullet train are blindingly clear. Tokyo-Osaka in 2 1/2 hrs…..yes, the plane is faster, but by the time you get to the airport, security etc etc, you don’t really save much time by flying.

    Plus, having another entire mode of transport in competition with the airways keeps EVERYONE on their toes. If the airlines suck, people will ditch them. Ditto the Bullet train.

    And as an aside, I avoid all U.S carriers at all times, everywhere. They are a frickin’ joke compared to any of the Asian or even European carriers.

    1. propertius

      I was quite fond of the Shinkansen when I lived in Tokyo – but I recently had the (delightful) experience of taking the TGV from Zurich to Paris. First class on the TGV is a wonderful way to travel (and cheaper by far than a coach air ticket). Quiet, comfortable, punctual, and downright relaxing – in other words, the exact opposite of air travel.

      1. LucyLulu

        Agreed about first class on TGV, I had the privilege to take it a couple years ago from Lyons to Nancy then later on to Paris. Fast, clean with a booth to spread out newpaper and sandwich. I’d just as soon never fly again, though the European carriers are better than the American ones.

        In comparison, mass transportation here in the US is an embarrassment.

  8. Max424

    “…the seats are even less comfortable than on planes, which is hard to do.”

    It is indeed hard to do. In fact, it takes great foresight!

    Man, you’re between a rock and hard place in this country, everywhere you look.

    You should get your own train.

    http://www.youtube.com/watch?v=wRXKHTTzayU

    Note: I believe Strelnikov is Russian for Smith

    1. F. Beard

      “…the seats are even less comfortable than on planes, which is hard to do.” Yves Smith

      Filthy bean counters at work? Some sort of monopoly at play? Usurers to pay?

      1. EH

        I’d actually assume it to be a train thing. Even though trains could provide the height of luxury a century ago, CalTrain’s seats rival the styrofoam planks used on airlines, without reclining.

        1. ScottS

          Amtrak is quite nice — especially the quiet car. Grab coffee from the dining car in the morning, or a beer or wine on the weekend. Now they have WiFi, I hear, which was my only complaint about the trains. I would take it more, but it doesn’t seem to go anywhere useful and when you get there, there’s no public transportation to get you the last mile.

          But maybe I’m biased since I truly despise flying. Getting to the airport, getting paperwork in order, the humiliating ritual doffing of the shoes and belt, the groping/cancer dilemma, sitting around waiting or eating at the grotesque airport food joints, cramped cabins, people who can’t leave their carry-on luggage alone, turbulence, the shrill whine of jet engines, losing luggage, etc. etc. I give flying the nod for much better views — if you have a window seat — but that’s it.

          1. Yves Smith Post author

            If you go on a train where the seat next to you is empty, then it can be better, but that’s true on planes too. I was last on an Acela that was packed, I had to wander all over the train to find a seat.

  9. Stephanie

    On this point of needing regulation…I think it important to point out that regulation is okay with a lot of these companies, if that regulation is to their advantage. I suppose obvious point is obvious. In any case, I see this most often in the food industry, in which regulations are made (very often in the name of ‘safety’ or ‘health’) that undermine the development of stronger local food availability and production. Recent case in point here in MI: http://regionalfoodsolutions.com/2012/03/07/alarming-step-in-mi-to-outlaw-heritage-pigs/

    And here are some more links on other aspects:
    http://blog.sfgate.com/nov05election/2011/06/07/food-safety-chief-defends-raw-milk-raids/ (please note who heads up the FDA)
    http://usnews.msnbc.msn.com/_news/2012/02/15/10418406-amish-farmer-targeted-by-fda-raids-shuts-down-raw-milk-business
    http://www.adistinctiveworld.net/?p=6091
    http://latimesblogs.latimes.com/money_co/2010/07/raw-milk-raid-rawesome-venice-video-raw-food-.html

      1. F. Beard

        Haha! Let the food safety Nazis (Do I slander the Nazis in this case?) try to outlaw church potluck dinners!

    1. Nick

      The Food Industrial Complex is terrified of the local organic food movement because it threatens their model.

      Do your part by shopping at your locally owned market that sells organic food. If you are in California make sure to sign the ballot proposition that will put the mandatory labeling of genetically modified food on the ballot.

      http://www.labelgmos.org/

    2. EH

      I don’t really think this is the topic upon which to vomit random regulatory concerns. “…and another thing, have you seen what it takes to claim a home office deduction?”

  10. Rotter

    “That means we need some sort of mechanism to remedy the power imbalance.”

    This is true. and i will be the first to suggest, and to vote for, regulation and for public flogging of supervisors and gate personell who violate it. until we can find a way to impose thar regime (and we really should be working on that) dont give any of these scurrilous dregs, and sadly thats most of them now, ANY of your money. Although the possibilty exists that the gov may force you to buy thier products in the future, (health insurance), for now i suggest dropping out of the whole scheme.

  11. mitchw

    You fly to DC? Why? I drive from Westchester to my sister’s in 4 hours time, door to door. It takes 6 gallons of gas+EZpass tolls. I take a rest break. I take my shoes off as long as I like.

    1. Yves Smith Post author

      1. You can’t work when you drive and I am super time stressed all the time.

      2. I am proud to have never owned a car. Most people in Manhattan who don’t have kids also don’t own a car.

  12. Thomas

    You don’t need any new “regulations”. You just need a good law firm. A couple of solid class-action lawsuits – under the consumer fraud laws already on the books – should put an end to these shoddy practices.

    1. Yves Smith Post author

      I didn’t unpack it in the post, but it is much harder for class action firms to win decent sized judgments than it used to be. A lot of packing of the court (particularly in states that used to award big judgments like Alabama, its Supreme court race is far and away the most costly in the US) and a resultant narrowing of what a ‘class” is for class action (so it’s much harder to get a big group on relatively “small” abuses, like the ones in tens to hundreds of dollars per person range).

  13. Ed

    Airline ticket pricing systems are weird. With one internation route I fly often, I discovered that it was cheaper to buy a non-flexible ticket and pay the extra charge to change it later, than to buy the flexible ticket. I can’t figure out why this make sense from the airline’s perspective.

    But I called the airline and verified this before I bought the ticket, and really would never have figured it out otherwise. The pricing systems have gotten complicated enough that its better to get into the habit of calling the airline instead of relying of whatever information they put online. Maybe travel agents will make a comeback because of this situation.

    My experience is consistent with the larger point of the post. I’ve encountered enough attempts to wrongfoot the customer with the fine print and poor disclosure that I’ve basically just started assuming with any transaction with any large company that they will try to rip me off at some point. And we have been going through a period where investors, mainly pension funds, have been demanding larger returns than be provided by business growing without resorting to fraud. So we get more fraud.

    1. reslez

      I’ve basically just started assuming with any transaction with any large company that they will try to rip me off at some point

      This.

      These businesses practices are creating a culture of fraud. Consumers will no longer trust any business entity. This causes tremendous loss of efficiency in the marketplace. The bogus fees reward malefactors and drive out honest merchants, as Bill Black keeps saying. $25 here, $50 here… short term greed destroys the economy. Civilization is based on trust.

  14. kingsnake

    I was just telling my wife this morning, that as soon as someone comes up with a better means of transportation, the airlines will cease to exist overnight. They are that poorly run, and outright malevolent towards their customers.

  15. Ed

    About the subdiscussion on the best way to get between NY and DC, someone suggested driving and that has to be the worst way to do it as a solo traveller. The most direct route involves lots of bridges, lots of tolls, and lots of traffic, and all this is compounded if for some reason you are trying to do this from Manhattan.

    Since Amtrak and the air shuttles are serving pretty much the same market, they should be comparable with price and service. However, my experience with Delta has been much more positive than described here, so the issue could be with the airline. Now that they got wifi on the Northeast corridor trains, even the slow ones, I would give the edge to Amtrak, though I agree that it can be easier and quicker to get to LaGuardia from the east side of Manhattan than to Penn Station. And there is also the bus.

    1. EH

      It sounds roughly similar to discussions of hard drive manufacturers. Get a passel of nerds together and you’ll hear one person say that Seagate drives will crash as soon as they smell electricity, another will say they’ve got a Seagate that’s been running flawlessly for 15 years, but don’t buy Hitachi, those are the worst! Yet another person pipes up “I live an die by my Hitachi drives, I won’t buy anything else!”

      I think this just means that they all suck equally and that experience is random.

  16. Damian

    your experience with USAIR is the tip of the iceberg when it comes to the banks approach to business spreading beyond that industry

    there is a quiet move to take extraction to a new level with fraud large and small being the only tools left in the bag as we go to a largely rent based economy

    AT&T eliminated the right to collective action on a greviance in their contracts and this is spreading to other companies and the banks showed that they can steal outright – the lack of enforcement mechanisms will encourage the tools of fraud to be used in more imaginative ways – the courts are no solutions the judges are coopted more and more by the local law firms

    people as they get burned will pull back and slow the number of transactions tremendously just like in real estate

    the second bigger wave is coming

  17. Bill H

    Yves, you are right that the Airlines ‘get away’ with this behavior because they have your money and people are resigned to the abuse. But I have found though that a properly addressed letter of complaint with a calm restating of the facts is a pretty easy way to get the airline to offer vouchers for future travel. In fact, I have done this so often that I have gotten vouchers when I complained about voucher-paid travel. I would suspect that you will be contacted soon by US Air with offers of free vouchers so they can change your mind on their service.

    I’m not suggesting that the system shouldn’t change for the better for everyone. But the fact is that American companies are more afraid of bad press and complaining customers than regulation. So what I am suggesting is that if more people knew how easy it is to get a private settlement from a complaint letter, these letters themselves might force the change more effectively.

    PS, I have had similar success with a complaint letters to Wells Fargo (copied the Comptroller of the Currency) over a fraudulent late charge. A miracle, I know, after months of reading this blog.

  18. phemfrog

    I agree completely. I have experienced many of the same type of abuse from all sorts of large companies. Telecom, utilities, rental car agencies…the list goes on and on. Hidden fees, poor disclosure, rude service… I usually catch these problems or try to avoid these companies, but I pine how many folks ate losing money. A few bucks here and there from millions of customers means lots of profit.

  19. Eagle

    This is bizarre – if they’re just looking to scam you, why do the phone reps tell you something different than the gate agents? Also, why couldn’t the phone reps change the ticket directly, and just have you print a new boarding pass at the airport?

    I try to avoid the legacy carriers as much as possible too though – I know Jetblue goes to DCA.

  20. Fraud Guy- Also

    To me, a key part of this story is the inherent inadequacy of over-the-phone customer service. Yves’ story of unreliable advice from the US Air phone agents closely parallels the many stories she has chronicled about mortgage borrowers receiving similarly unreliable information over the phone about modifications. Yves and the borrowers rely on the information to their detriment and then are unable to prove what advice they were given in order to insist on or legally enforce performance.

    The powers-that-be have set up the phone customer service system to protect themselves while keeping you from protecting your interests. Specifically, they can record your phone calls with them, but generally you can’t do the same, mostly because not knowing where the phone agent physically sits means you have to ask their permission to record (they may be in an all party consent state). Agents are generally trained not to give this permission.

    If consumers had a general legal right to record over-the-phone customer service interactions, I am fairly confident that the market would deliver powerful tools to facilitate holding companies accountable. Services like Google Voice would want to offer “call notarization service” as an easy extension of what they already do because it would allow them to advertise to consumers at precisely the moment they are unhappy with incumbent business relationships and likely to switch. With “call notarization”, the service (e.g., Google Voice) would actually make the recording and keep custody of it, so that its authenticity could never be disputed, and the customer could transmit it to a customer service rep by sending them a link.

    It shocks me that this regulatory state of affairs continues unchallenged with respect to call recording.

    1. EH

      All capitalists are externalizing machines. The more they can make it someone else’s problem, the better. Until it isn’t, but I haven’t seen a lot of “isn’t” in the past 40 or so years I’ve been trying to pay attention.

  21. steelhead23

    The market is a carnival and we’re all carnies, trying to outscam one another. Don’t know who the 5%ers are at US Air, but I suspect their cigars cost more than that change fee. I too, miss those days when customer satisfaction was a common goal.

  22. Roy Smith

    Try small claims court, like the woman who sued Honda for misrepresenting the mileage of their hybrid cars, if you think there is a case to be made. You may or may not win, but you will at least have the satisfaction of knowing that they will spend more fighting it than they bilked you in the first place, and it will probably cost you nothing except a few hours of your time.

    1. LucyLulu

      Would a large corporation even show up? I wouldn’t be surprised if suing in small claims wouldn’t usually result in an award by default.

  23. Johnny Edwardo DeMarco

    Ah yes, lifestyles of the rich and famous, gone is pleasurable travel by jet. But let’s ignore sky-high unemployment, rising levels of extreme poverty, and 45.4 million people on food stamps for a moment.

  24. particle61

    its called unfettered capitalism, friends & supported by the regulators (even in the era of ‘hands-off regulation) .. good ‘ol american laissez aint fair

  25. TimH

    Reminds me how United Airlines runs it’s crappiest planes between SFO and LHR, because that segment competes only against BA and Virgin… and UAL’s aircrew have been consistently friendly/helpful in my experience, unlike the other two.

  26. ep3

    poor yves.

    yes yves, this is the life us “Non 1%’ers” have to live everyday.
    here’s my example. I just picked up my second leased vehicle. After having a couple issues with my first vehicle, this second also had things that I found were not up to a standard i would consider a $40K vehicle to have.
    Let’s start with the first car. The windows moved in their tracks. So I told my dealer. He did not find a problem. Yet he never asked that I demonstrate it. So I called the manufacture. They told me they were sorry I was unhappy but I should try to work things out with the dealer. They agreed to speak to the dealer on my behalf. After that the dealer examined things again. Still did not fix problem, which was visible. So I called manufacturer back. They said “sir you can either return to the dealer or choose another dealer”. I said “so why did i bother calling you? You haven’t done anything to resolve the situation”. No answer. And now with the new vehicle and issues, I am being told by the manufacturer “there’s nothing we can really do to resolve these problems, please speak with the dealer”.
    We all have stories like this. But when you are dealing with an “global” company, you can’t visit their local office and speak to a manager that can actually do anything. When you call someone like AT&T, you get a different person every time, in a different part of the world. They claim that they have detailed customer files. But all it takes is a bad computer and your info is deleted. There is no way to say “hey, remember last week mgnr. jason, when you said my rate would be 19.99? Why is it 29.99?”. The person on the other end of the phone doesn’t care about you. They are just another working stiff trying to make ends meet. They know that when worse comes to worse, you will end up paying the bill. because you are dependent upon them. When there is only one mega corporation, how can you go elsewhere?

    1. reslez

      Corporations were invented to deflect responsibility. They’re like a machine that separates the people who act from the consequences of the action. In a big corporation nobody is responsible for anything. The person who answers the phone didn’t create the policy that’s designed to screw you over. So what point is there in yelling at the phone rep? They’re a working stiff like you. They’re not responsible. And companies take advantage of that fact.

      The person who created the policy is insulated from the consequences.

      1. reslez

        Another note, that part of the reason corporations dodge responsibility to their customers so well is because they are private tyrannies. Decisions are made by higher ups and dictated down to inferiors, who don’t have input into decisions. So again the people who are responsible for decisions are separated from the people who implement the policy.

  27. Hugh

    Frankly, I am surprised that Yves was invited to the conference at all. Generally if you have topline kleptocrats like Sperling and Rubin on the bill, the range of views runs the gamut from the corporatist to, well the corporatist.

    It being an election year I would expect Sperling and Rubin to be lying between their teeth, but then again, it being Sperling and Rubin, they would lie anyway. The important thing though is to realize that they are lying. These are not essentially good people with wrong ideas. They are criminals. The damage and death they have wreaked upon this country and that they need to answer for dwarfs that of a piker like Osama bin Laden.

  28. Peter Pan

    I remember the good old days when US Scareways (US Airways) was called Alligator Airlines (Allegheny Airlines) and you knew you were going to be bitten in the butt by their snafu.

    Of course, with deregulation (now quoting from US Airways): Airlines have new freedom to expand their route systems and more flexibility to develop new and innovative pricing structures,….

    Which translates into: more flexibility to develop new and innovative schemes to hose the consumer. (gotcha !!)

    Any representative or policy advisor of large business interests that invokes the use of innovation should always be interpretted as innovation in fraud.

  29. Diogenes

    I will not fly US Air. I remember a NY to Phoenix flight where they charged for water from a pitcher.

    I recently booked an American Airlines flight on Amex travel using miles. I was able to pick out my seats on the Amex site.

    When I signed into the American site to check my flights, it indicated that I had no seat assignment. I was given the chance to pick assigned seats, but – surprise – every seat avaialable was a premium seat for $39 more.

    I spoke with American. They told me Amex does not have their AA site in “real time.” So I couln’t pick seats from Amex even though the seats were listed on my Amex itinerary.

    And, every time I tried to select a seat on American, the seat was designated “premium.” Try again, a new set of seats are premium, lather, rinse, repeat.

    It’s like Las Vegas where the house always wins. I will never fly American again. Period.

    It seems like Jet Blue and Southwest are the only ones that don’t charge change fees or bag fees or try to rip you off.

    1. Ishmael

      Diogenes — I had to make a flight out of no where to the east coast right before New Years. My client paid a bunch for my ticker and once I purchased it (on the American site) I found out it was near impossible to get a ticket without paying a premium charge (I had already told my client the cost). I ended up sitting in a seat meant for a midget and I am 6’2″ and very broad across the shoulders. The guy next to me made me look like a small guy. In summary, the worse flight I have had in a long time. Some how on the flight back I was able to wrangle a decent seat.

      None of the airlines are worth flying except Southwest and maybe Jet Blue (last flight I had on Jet Blue was very good but it has been a while). It is funny that Southwest which started out as a discount airlines is now a superior product.

      1. LucyLulu

        I ended up sitting in a seat meant for a midget

        I’ve found that spending the few extra bucks to upgrade to the toddlers section is well worth the money.

  30. off_leash

    Tweeting about bad service is much more effective if you use Twitter names @USAirways and hash tags #sucks

  31. Tarmac Horror

    Poor US Hairways. Can’t they do it like the Banksters?
    For example, Wells Fraudgo demands consumers waive key rights. The Mafia has long used forced arbitration clauses and bans on class actions in their scheming/contracts, Every stiff must sign before they become a Gangster’s customer. If they rip you off, treat you like cattle, lie and cheat – you can’t hold them accountable in court. Mooo!

  32. csissoko

    I second Roy Smith. If you’re really angry you should just file a small claims court suit against them. Filing a claim takes very little time and a small fee. You’re already exercised enough to have collected the documentation you need. Showing up in court is inconvenient — but corporations often prefer to settle with you anyhow.

    This has the advantage of significantly increasing the costs of corporate misconduct. If everybody sued over these issues in small claims court, we could put an end to this kind of behavior.

  33. fausto

    To hell with small claims. If you really want to get their attention, file a class action for treble damages for unfair and deceptive practices under the FTC Act and parallel state laws.

  34. Ishmael

    I have a basic policy of never flying US Air or United. I had too many flights cancelled on me. Period!!!!

    Air travel in the US sucks any more unless you are flying on Southwest. You never know what you are going to get. I only fly if I can not drive there in 8 hours!

  35. citizendave

    I’m convinced we are seeing a widespread tendency to emulate Coldman in treating the customer as victim. Or maybe it’s that, as well as people don’t really care whether you like it or not. From tech support to customer service to getting what was ordered at the drive-through, it’s always a crapshoot lately. On those rare occasions when I have a happy interaction with somebody I tend to be effusive when thanking them for being nice to me, or for being competent.

  36. Crazy Horse

    Welcome to the Third World. Now, if you want to fly on an airline that still provides service choose LAN (Chile) or Aviancia,(Columbia, but certainly don’t fly on any American based airline.

    I’m surprised you didn’t know that American/Delta/United/US Air all have full time staff psychologists who’s job is to devise policies that create the maximum number of pissed off customers. Homeland Insecurity has been a great help in that enterprise.

  37. William Allen

    Very true…but its not just US Air. It is all of them. I have had particularly bad experiences with British Airways and American and Cathay, especially when I purchase an around the world ticket through their “One World” (yeah, right, what a joke). I lost a full fare first class ticket on BA from London to New York a couple of years ago during the BA strikes because I purchased the around the world on Cathay. BA had agreed to extend the expiration deadline because of the strikes, but they refused to talk to Cathay on my phone when I handed it to them and Cathay refused to call BA. It is consumer fraud…and they know they have you. Why again did we de-regulate?

  38. eyesoars

    Here’s some singing on the trials and travails of bargain air travel in the UK. The words are not as comprehensible as they might be if your Irish brogue isn’t up to snuff (but that may just make it better, especially the day before St. Patrick’s day).

    http://www.youtube.com/watch?v=ZAg0lUYHHFc

    Warning: bad language. Very funny bad language.

  39. Charles Yaker

    Several people mentioned letter which is always a good idea. But I think just sending a copy of this post along with the URL to the Chairman and Cheif Executive will let them know that there are costs (negative publicity) involved.

  40. nowhere

    The main effect deregulation has had on the airline industry is that none of them can make any money. They’ve price warred each other into non-profitability, cut wages and benefits to the bone until even that wasn’t working and are now well into the “screw-the-customers” phase trying to keep it going. And they’re STILL going bankrupt regularly. Look at how many established airlines are gone. Look at how few of the “innovative, hungry start ups” that were supposed to revolutionize the industry are gone. The hub-and-spoke strategy and the reservation of landing slots by various airlines in various areas means that in many regions you’ve pretty much got the choice of one airline if you want to fly there.

    It’s the same as all deregulation drives. Often there are examples of regulations which are counterproductive but rather than change the regulation or the regulator they push to get rid of ALL regulation. Which makes about as much sense as dealing with a sore elbow by having all one’s limbs hacked off.

  41. CaitlinO

    Spirit Airlines is another corp in the business of ripping off customers rather than providing a plane ride. I recently needed to get to Las Vegas and, via Travelocity, saw that Spirit was a bit, some $35 as I recall, lower than the next cheapest airline. It was a short trip so I packed a carry-on to avoid the $25 each way checked bag charge. Imagine my surprise to be hit with a $40 CARRY ON BAG CHARGE each way when I arrived at the airport. In addition, there was a $5 charge if you didn’t use their incomprehensible electronic boarding pass dispenser but tried to have a ticket agent issue the pass, instead.

    Nothing that I received from either Travelocity or Spirit disclosed these charges, which made using Spirit more expensive than flying American. I pitched a fit both to Spirit and, on the phone, to Travelocity to no avail.

    This comes out to a grand total of $90 in hidden charges on a ticket advertised and sold at a price of $223. A mere 40% rate of larceny.

    At the airport Spirit employees tried to justify their theft by telling me that the charge was disclosed on their website. But I had been on the website to find the terminal and gate numbers and had seen nothing. No one could tell me WHERE on the website the charge disclosure was hiding and the gate agent was unable to find the information when I demanded that he show it to me.

    Of course, this begs the question of how a customer/muppet would even know to look for a charge that, according to Travelocity, is not imposed by any other airline in the country. I didn’t look for a carry on bag or boarding pass charge because I never heard of such things. I also didn’t look for extra charges on dog owners, women or people who like the color red.

    Sadly, you have to treat every single entity you do business with as an adversary which will do everything possible to rob you blind.

  42. HS

    Good call on deciding not to buy from them again. I’m not sure what good regulation will do here. Their actions were stupid and unjust.

    However, in your dealings with governments have you found yourself treated better? I can’t say that this was worse than the last time I was called for jury duty or some experiences at the post office. This is nothing compared to some horror stories. Given how we are treated by our governments, should we expect them to be competent and willing to regulate petty abuses like this away?

  43. JerryDemim

    I’m in the airline business (unfortunately) and it’s my impression that US Scareways is the worst of the worst. They outsource as much flying as possible to bottom feeder regional operators like Mesa who have horrible maintenance and reliability, hence the incredibly high number of cancelled flights. I avoid them like the plague. They’ve managed to gain near monopoly status in Charlotte and their employees are working for about 60% of the all-ready low industry average so they are finally making a profit. The gotcha charges help too of course.

    One thing that I think has been absolutely terrible for the industry and for the passenger, besides deregulation, that I think most people seem forget is the online booking trend. In 1999 Jet fuel cost next to nothing and the internet was just beginning to catch on. Service on airlines was still decent and the Airlines were making money and their employees were still getting paid fairly. But oil went way up, then everyone started using the net and sites like Travelocity and Priceline which lead to an airline seat becoming a fungible commodity where the only thing that mattered was price. At first the low cost carriers won the day and made the most of this new pricing structure but then the legacy carriers figured out that if people just wanted a cheap online seat purchase then that is what they would give them; minus blankets, meals, checked baggage, customer service etc. etc. and here we are.

    Americans need to demand the Airline industry be re-regulated and in the meantime vote with your wallets and do not buy the super cheap ticket on that crappy carrier.

    As an aside I think the Airline industry has the worst management of any American industry. It’s where the B-team flunk outs who couldn’t cut on Wall Street go to pillage and steal. Instead of actually innovating and focusing on providing a better consumer experience/product the sole focus for many years now has been cost cutting at the expense of their employees and their customers in order to boost margins for shareholders. The short-sightedness and idiocy of these people are too legion to mention. I have witnessed so many instances of management pissing away thousands of dollars and doing irreparable harm to their customers or employees just to save a lousy dollar somewhere else. I blame it on Business Schools and the obsession with stock price and shareholder value.

    Sorry Yves.

    1. LucyLulu

      “Mesa who have horrible maintenance and reliability, hence the incredibly high number of cancelled flights

      I was under the impression that flights were being cancelled due to not being filled to capacity. No???

      I often talk to pilots and have been told that the pay on regional airlines is also much, much lower. IIRC, a pilot might start at $40,000. Compare that to my brother-in-law who flies the big Airbus with seniority at US Air and makes about five times that. Because of where I live, Delta and US Air are pretty much my options. And sometimes I’ve flown Southwest. I can’t tell the difference between them. None of them have customer service. I only like US Air because I can get extra perks with my brother-in-law. Not discounted travel unfortunately but extra info on flights and he’ll make a phone call if I run into trouble. Also, I tend to travel light but don’t like to lug bags onto airplanes and try to throw them in the overhead bins and hit unsuspecting passengers in the head (they don’t seem to care much for it either). I’ve found it most convenient to wait to board until the end when the airlines will be accommodating in gate-checking my bag for free.

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