Federal Maritime Commission to Weigh In on Cruise Line Refund Policies

(2:05 p.m. EDT) -- The U.S. Federal Maritime Commission would like to develop a uniform standard for the process of passenger cruise refunds -- including clarity on how people receive them -- following the turmoil created by the ongoing COVID-19 coronavirus pandemic.

The findings, which were noted in the Maritime Commission's Fact Finding 30 Interim Report issued on July 27, are being headed up by Commissioner Louis Sola. The Fact Finding investigators interviewed a number of cruise lines on their refund processes, following a number of complaints forwarded to the Commission in the wake of the unprecedented cancellations caused by the shutdown of worldwide cruise travel in early March.

"Our analysis revealed that, for the most part, consumers are satisfied with the responses they have received from the PVOs {Passsenger Vessel Operators, aka cruise lines} concerning the cruises canceled due to the CDC no sail order," said Commissioner Sola.  "That said, we discovered some places where we, as a regulator, could improve our ability to protect the consumer; that is why I propose amending the Commission's rules related to non-performance and refunds."

The Commission's findings noted that the fact that refund rules and regulations varied considerably from line to line resulted in increased consumer confusion.

"Among the more significant observations was the lack of consistency among the PVOs when it came to their ticket refund practices," the report said. "Also of note, though not always the case, was the recognition that said practices were not always easily discernable by the consumer."

Complaints Arising from COVID-19 Cancellations

The Commission noted that it received 418 telephone complaints about PVO's and their refund policies between February and early July. It also fielded a number of email complaints with regards to refunds that, cumulatively, spurred the investigation.

"Several people emailed the Fact Finding 30 inbox with complaints," stated the Commission's report. "One person who requested a refund was frustrated that they were originally told they would be refunded within 60 days only to have the time extended. As such, this person has initiated a dispute with their credit card company.

"Another person complained that it had been 83 days and no refund. A third person complained about the refund process taking 30 to 60 days. The fourth complaint received was about a PVO refusing refunds to passengers."

The report also noted substantial confusion and variability regarding refund criteria and policies from line to line; policies that changed dramatically as the coronavirus pandemic progressed. While individual lines, or PVO's, were not named in the report, the findings reveal that this variance in policy, both in terms of refunds and Future Cruise Credits, makes it difficult for consumers looking to make informed decisions about what to do.

The unprecedented scope of cancellations has also resulted in bottlenecks due to credit card processing times, stay-at-home orders, and other mitigating factors: "One PVO also explained their staff has been reduced. Another specified that in refunding passengers, they are dealing with 13 different currencies."

Cruise lines also pointed out the difficulties that arise when customers dispute charges with credit card companies rather than waiting for refund, a situation that put increased burdens on lines to avoid double-refunds, further taking time away from the refund process.

Recommendations Regarding Refunds

Because of the variability in refund processes and policies, Commissioner Sola recommended that cruise lines take the following measures:

• Full refunds must be paid within 60 days following a passenger refund request for voyages that are canceled or delayed more than 24 hours for any reason other than governmental order or regulation;

• Sailings canceled due to government order or regulations must be refunded within 180 days following a passenger request.

• Consumers canceling as a result of a public health emergency when their selected sailing is still set to embark on schedule will have to provide Future Cruise Credit equal to the consumer's amount of deposit.

• Cruise lines may set a reasonable deadline for the consumer to request a refund, no later than six months after the scheduled voyage.

• Refunds should include all ancillary fees paid

• Refunds should be processed to the original form of payment.

"This proposal benefits both the consumer and the industry, it is a product that everyone affected can and should embrace," said Commissioner Sola.

The Commission expects to vote on whether to initiate these recommendations into law in mid-August. From that point, the regulations would have to be entered into the Federal Register.

Cruise Critic will update this story as more information becomes available.