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Federal Register / Vol. 86, No. 137 / Wednesday, July 21, 2021 / Proposed Rules
refunds are not provided prompt refunds, because 49 U.S.C. 41704, note applies to airlines.
The Department has tentatively decided to not apply the new proposed baggage refund requirements in 14 CFR
part 260 to ticket agents. The proposed part 260 makes cross references to certain minimum standards of the airline customer service plan required by 14 CFR 259.5, which currently applies to carriers but not to ticket agents. The Department is required by 49 U.S.C. 42301, note prec., to issue a rule requiring ticket agents with an annual revenue of at least $100 million to adopt minimum customer service standards, and intends to address this requirement through a separate rulemaking.6 The Department seeks information on ticket agents involvement in collecting baggage fees from passengers, either as a carriers agent or as a principal. The Department also notes that, pursuant to 14 CFR
399.80l, a ticket agents failure or refusal to make proper refunds promptly when service cannot be performed as contracted, or a ticket agents representation that such refunds are obtainable only at some other point, constitutes an unfair or deceptive practice.
Regarding multiple-carrier itineraries, the Department agrees with Consumer Union that expecting consumers to track down which airline caused the delay would be an unreasonable burden to place on consumers. It would also be costly for carriers to determine which carrier is at fault for causing each bag delay. Accordingly, this NPRM proposes that the carrier that collected the baggage fee must issue the refund. With respect to multiple-carrier itineraries for which a ticket agent collected the bag fee, the Department is proposing that the carrier that operated the last flight segment must issue the refund if there are multiple airlines involved. The Department notes that the operating carrier of the last flight segment may be a fee-for-service carrier that normally does not handle baggage fee refunds since these types of entities generally do not sell tickets or ancillary services. As such, the Department solicits comment on whether, rather than requiring the carrier that operated the last flight segment to provide the refund, it should require the carrier that marketed the last flight segment to issue the refund when a ticket agent collects the bag fee.
Carriers would be free to prorate the cost of refunds among themselves through contractual agreements, if so 6 See https www.reginfo.gov/public/do/
eAgendaViewRule?pubId=202010&RIN=2105-AE57.

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desired, but consumers should be afforded a simplified process in pursuing a refund from one carrier that already has the payment information for issuing refunds. The Department seeks comment on whether this proposal regarding refund obligations adequately addresses the issues raised when multiple parties are involved in the sale and provision of air transportation or whether there are additional issues that need to be addressed.
5. Refund Mechanism and Passengers Notifying Carriers About Delayed Bags To Receive Baggage Fee Refunds The ANPRM
In the ANPRM, the Department sought comment regarding the appropriate method for providing a refund for delayed baggage. It noted that when refunds are due on purchases with a credit card, the Department already requires a carrier to transmit a credit statement to the credit card issuer within seven business days of receipt of full documentation for the refund requested. In addition, the Department requires that, with respect to purchases with forms of payment other than credit cards, an airline must provide a refund within 20 days of receipt of full documentation of such a request.
Because 49 U.S.C. 41704, note states that carriers should promptly provide an automated refund to an eligible passenger when the carriers fail to meet the applicable time limit in delivering the checked bag and the passenger has notified the carrier of the lost or delayed checked baggage, the Department asked whether prescribing a specific mechanism for the carriers to use to provide the statutorily required automated refund would negatively or positively impact carriers and consumers.
Comments Received To determine how to promptly provide an automated refund for delayed bags, most commenters state that the Department should apply its existing requirement on providing prompt ticket refunds. Specifically, when a refund is due, 14 CFR part 374, which implements Regulation Z of the Board of Governors of the Federal Reserve Board 12 CFR part 226, requires a carrier to issue a refund of ticket purchase price paid by a credit card within seven days after receiving a complete refund request. The regulation in 14 CFR 259.5b5 further requires a carrier to issue a refund of ticket purchase price paid by cash or a check within 20 days after receiving a complete refund request. However,
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airline commenters expressed concern that this type of automated refund may not be feasible for interline itineraries because refunds can only be made after a consumer informs the airline that charged the baggage fee that the bag is delayed. Some airlines are also concerned about the difficulty in issuing automated refunds when passengers purchase tickets from travel agents or as a part of a tour package.
DOT Response The Department tentatively interprets the requirement in 49 U.S.C. 41704, note to mean that a prompt and automated baggage fee refund is due when the baggage delivery delay has exceeded the applicable delivery deadline and the passenger has notified the air carrier or foreign air carrier of the lost or delayed checked baggage. The clock for determining whether the refund is prompt starts at the expiration of the delivery deadline or when the passenger provides notification of the lost or delayed baggage, whichever is later. DOT
proposes to require airlines to provide refunds for delayed bags within seven business days of a refund being due for credit cards and within 20 days of a refund being due for payments using cash, check, vouchers, frequent flyer miles, or other form of payment. For the refund process to start, passengers would need to notify the airline that collected the bag fee about the delay in receiving the bag. If a ticket agent collected the bag fee, passengers would need to notify the carrier that operated the flight about the delay in receiving the bag. With respect to multiple-carrier itineraries for which a ticket agent collected the bag fee, passengers would need to notify the carrier that operated the last flight segment about the delay in receiving the bag. The Department acknowledges that this notification requirement on passengers would encompass two different scenarios, each of which would impose a different level of burden on passengers. First, in situations in which the carrier accepting and handling a mishandled baggage report MBR from the passenger is the same carrier that collected the baggage fee, the filing of an MBR would constitute notification from the passenger to the carrier that the baggage was delayed for the purpose of receiving a checked baggage fee refund. It is the Departments understanding that the vast majority of itineraries marketed to consumers in the United States are either itineraries involving only one carrier or itineraries involving fee-forservice codeshare operations itineraries involving a marketing carrier and its
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