Air Canada to pay nearly $5 million to settle U.S. government allegations

Air Canada will pay $4.5 million to the United States Department of Transportation (DOT) to settle allegations that the airline failed to inform passengers, as required, that additional fees could apply if they paid their fares and then requested a refund.

“These airlines should not attempt to nickel-and-dime people when they are at their most vulnerable — just because they don’t want to pay their bill,” said Jeff Ventura, the acting chief administrative law judge for the DOT.

In addition to the $4.5 million, Air Canada has agreed to adopt new policies that do not include an additional fee if consumers request a refund on the full cost of the ticket, and pay a $200,000 fine to the Consumer Financial Protection Bureau for “failing to give affected customers at least two days of advanced notice that they needed to return a refund.”

The airline will also have to improve its communications to customers, including providing better customer service and undertaking a monitoring program to “maintain proper disclosure of their refund terms” in advance of future events.

It is unclear whether the new regulations will be enforced against other airlines or whether the DOT will pursue other airlines over similar issues.

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