To help! My travel agency closes its doors and I lose $ 2,000


Earlier this year, I used STA Travel to book a British Airways flight from Tucson, Arizona to South Africa, which was scheduled to depart in March. Then the pandemic struck, one of the stages of the flight was canceled and I canceled my trip. After a few round trips, STA obtained a refund from British Airways. An STA representative told me that my plane ticket – $ 2,059.36 – would be credited back to my credit card account within 60 days. Two months came and went. Then I learned that STA had gone bankrupt. Kaitlin

When I first read your email, I was hopeful that your credit card company might step up and save the day. Still, I set out to find out more about the laws and policies at play, so I did what I usually do when I run a Tripped Up column: emailed sources in the industry and started a google document to organize my thoughts.

Notes have become a rabbit hole, expanding with media coverage of the STA collapse, a list of potential interview topics, email addresses for international news offices and lengthy financial documents. From scratch, one truth has emerged: Anyone trying to recover funds from a failed business will likely face some tough battles, big orders, and all the other clichés in the book.

“Usually, when a company goes bankrupt, it is mainly the vultures who pick up the bones,” said Ira Rheingold, executive director of the National Association of Consumer Advocates, a nonprofit organization based in Washington, DC. “The last people to get a piece of these bones will be the unsecured creditors: the consumers. “

Formerly a large travel agency for youth and student travel, STA Travel filed for bankruptcy in August after a wave of pandemic-related cancellations; it was the first major travel agency to fall due to the pandemic. Although STA Instagram account has been dormant for over two months, the comments remain a recording of unanswered questions and refunds in limbo: “I have a student who needs an update on their refund status and there is no literally has no way of reaching anyone, ”one user wrote. “I wonder how many people have had their hard-saved vacation money stolen,” said another.

From the start, your case looked like a maze of sharp corners and dead ends. I first visited the STA Travel website: close. Then I emailed the customer service agent you corresponded with: bounce. When I contacted the press office of Diethelm Keller Group, the former parent company of STA based in Switzerland, I received in return the following statement: “As STA Travel Holding AG is in insolvency proceedings, Diethelm Keller Group is unable to provide support or additional information.

I contacted the Arizona attorney general’s office after discovering an address for STA in Arizona – possibly a franchise – but a spokesperson told me all consumer complaints are confidential.

I considered calling British Airways, but decided not to; after all, the airline had already canceled your tickets and refunded your money (to STA). Customers hoping to cancel active bookings might get lucky by going directly to the travel agency in question, but anyone waiting for a pending refund from a middleman like STA likely wouldn’t.

I also thought about what would happen if you were to file a complaint with the Department of Transportation’s Aviation Consumer Protection Bureau, but decided that the details of your situation would almost certainly result in an additional waste of time. There are simply too many layers of gray areas: only one of your flight stages was canceled by the airline, you purchased tickets from a third-party seller, and your refund had apparently already been approved.

Travel insurance wouldn’t necessarily have been a quick fix either, said Jennifer Fitzgerald, co-founder and CEO of Political genius, an online insurance marketplace. Even when policies cover the financial default of a travel supplier, they come with many caveats, restrictions and conditions.

“Not all travel insurance policies include protection against financial failure, and not all suppliers will be covered,” Ms. Fitzgerald said. “For example, third-party sellers, such as travel agencies, will tend not to be viewed as travel suppliers, so the financial failure protection of travel insurance will not cover them.”

I put about 10 pages into a 90-page bankruptcy document outlining the liquidity ratio of the New Zealand branch of STA before (to use another cliché) I went back to square one: the credit card company.

Some credit cards include financial insolvency protection (designed to help cardholders when a tour operator goes bankrupt) in trip cancellation insurance. Others, including the Chase Sapphire Reserve card you used, exclude financial insolvency protection from insurance, processing it through standard dispute resolution channels instead.

In an emailed statement, a spokesperson for JPMorgan Chase said, “A cardholder may submit a dispute due to the financial insolvency of a merchant, which we review on a case-by-case basis.”

The Fair Credit Billing Act, a federal law enacted to protect consumers from unfair credit billing practices, does not have a specific exception for a merchant’s financial insolvency, but does take into account “charges for. goods and services that you have not accepted or that have not been delivered as agreed ”one of the many types of billing errors that consumers have the right to contestation. And while every credit card dispute is about the details, it is the simplest and most actionable decision for isolated consumers struggling with a business that has all but evaporated.

You might be wondering, as I did, if things are more complicated because you are a US citizen trying to get reimbursement from an insolvent Swiss company for a canceled UK flight. But as long as the consumer’s account with the credit card issuer (a bank, most likely) is based in the United States and the credit is issued to a resident of the United States, the transaction is covered by the United States. FCBA billing error rules

To protect your rights under the FCBA in The Before Times, you would have had 60 days from reporting with the billing error to dispute the charge. But these times are hardly normal. That’s why a representative of JPMorgan Chase – citing “your atypical situation with this merchant” – reimbursed you in full.

My quest unearthed further advice: Even if you file a dispute through a credit card’s online channels, also be sure to submit the dispute in writing, by regular mail, to the address specified by the card issuer for billing errors (FCBA condition). The Federal Trade Commission has a good sample letter online. If you do not move forward, file a complaint with the Consumer Financial Protection Bureau, which has jurisdiction over the largest banks in the country.

One final tip – and one final snapshot – from Mr. Rheingold: “This is the squeaky wheel, isn’t it?” Post something on social media: “Can you believe what this company did to me?” Or by saying, “I’ve been a card holder for 20 years and I’m getting rid of it from now on.” It’s not legal advice, it’s just practical. This is when you get your money back.

Sarah firshein is a Brooklyn-based writer. If you need advice on a best-designed travel plan gone wrong, send an email to [email protected].

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