Travel Agency Disputes: Refunds & Cancellations

Travel agency disputes have become increasingly common as the industry has evolved from traditional brick-and-mortar agencies to online travel agencies (OTAs), tour operators, and booking platforms. When your dream vacation turns into a nightmare—whether due to cancelled trips, misrepresented accommodations, hidden fees, or agencies that disappear with your money—you have legal rights and remedies. The U.S. Department of Transportation Aviation Consumer Protection Division provides resources for air travel complaints. This comprehensive guide explains the regulatory framework governing travel agencies, your refund rights, and step-by-step strategies for recovering money from travel disputes.

Types of Travel Service Providers

Understanding what type of company you're dealing with is crucial because it determines your legal rights and where to direct complaints:

Traditional Travel Agents

• Act as intermediaries between you and suppliers (airlines, hotels, cruise lines)
• May be independent or affiliated with a host agency
• Typically earn commissions from suppliers
• Generally do not hold your money—payments go directly to suppliers

Online Travel Agencies (OTAs)

• Examples: Expedia, Booking.com, Priceline, Kayak, Orbitz
• Function as intermediaries but may also be the merchant of record
• Handle payments and issue their own confirmations
• Subject to DOT regulations for airline tickets

Tour Operators

• Package travel components (flights, hotels, tours) together
• Often the actual service provider, not just an intermediary
• May be subject to seller of travel laws in their home state
• Greater liability for trip quality and delivery

Vacation Clubs and Timeshare Resellers

• Sell memberships or vacation points
• Subject to timeshare laws in many states
• Often subject to enhanced cooling-off periods
• High complaint rates—exercise extra caution

State Seller of Travel Laws

Several states regulate travel sellers through registration requirements, trust account requirements, and consumer protection funds:

State	Law	Key Requirements	Consumer Fund
California	Bus. & Prof. Code 17550-17556	Registration required; trust account or bond	Travel Consumer Restitution Fund
Florida	Fla. Stat. 559.927	Registration required; $25,000-$50,000 bond	Bond recovery available
Washington	RCW 19.138	Registration required; trust account	Trust account claims
Hawaii	HRS 468L	Registration required; bond	Bond recovery available
Nevada	NRS 598	Some registration requirements	No specific fund

Common Travel Agency Disputes

1. Refund Denials for Cancelled Trips

The most common dispute involves agencies refusing refunds when trips are cancelled:

• Agency-cancelled trips: You're entitled to a full refund if the agency cancels
• Supplier cancellations: Agencies should facilitate refunds from airlines, hotels, etc.
• Consumer cancellations: Subject to terms of the booking; may face fees or lose deposits
• Force majeure: Natural disasters, pandemics, or political unrest may trigger refund or credit obligations

2. Misrepresented Accommodations or Services

When the reality doesn't match what was advertised:

• Hotel quality: Star rating, room type, or amenities different from description
• Location misrepresentation: "Beachfront" hotel that's miles from the beach
• Included services: Promised tours, meals, or transfers not provided
• Bait and switch: Booking one property, being moved to another

3. Hidden Fees and Price Changes

Undisclosed costs added after booking:

• Service fees: Agency fees not disclosed until payment
• Resort fees: Daily fees not included in advertised price
• Exchange rate markups: Unfavorable currency conversions
• Post-booking price increases: Prices raised after confirmation

4. Travel Agency Closure or Bankruptcy

When an agency goes out of business:

• Check seller of travel registration status and bond requirements
• File claims with state restitution funds if available
• Contact suppliers directly—your reservations may still be valid
• Credit card chargeback for services not received

5. Fraudulent Travel Schemes

Outright scams posing as legitimate travel businesses:

• "Free" vacation offers: High-pressure sales for timeshares or vacation clubs
• Fake booking confirmations: No actual reservations made
• Phishing sites: Fake websites mimicking legitimate OTAs
• Advance fee fraud: Requiring payment before trip details are provided

DOT Protections for Air Travel

When your travel agency booking includes airfare, DOT regulations (14 CFR Part 259) provide important protections:

Airline Ticket Refunds

• Cancelled flights: Full refund required if airline cancels and you don't accept alternative
• Significant schedule changes: May entitle you to refund
• 24-hour cancellation: Airlines must allow cancellation within 24 hours of booking for full refund

Travel Agency Responsibilities

• Must pass through airline refunds to consumers
• Cannot impose their own non-refundable policies on refundable tickets
• Must disclose all fees before purchase

Credit Card Protections

Paying with a credit card provides powerful protections under the Fair Credit Billing Act (15 U.S.C. 1666):

Chargeback Grounds

• Services not provided: Trip cancelled and no refund received
• Services not as described: Material differences from what was advertised
• Unauthorized charges: Fees added without authorization
• Duplicate charges: Billed more than once for the same booking

Chargeback Process

1. Contact your credit card issuer's dispute department
2. Provide documentation: booking confirmation, communications with agency, evidence of non-delivery or misrepresentation
3. Your issuer contacts the merchant (travel agency)
4. Merchant has opportunity to respond
5. Issuer makes final determination

Time Limits

• Generally 60 days from statement date showing the charge
• For future travel, clock may start when service was to be provided
• Some issuers extend timeframes for travel purchases

Step-by-Step: Resolving Travel Agency Disputes

1. Gather all documentation: Booking confirmations, itineraries, receipts, communications with the agency, promotional materials showing what was promised.
2. Contact the travel agency: Start with customer service. Clearly state the problem and what resolution you're seeking. Get reference numbers for all contacts.
3. Escalate within the company: Ask for a supervisor or manager. For larger agencies, look for executive customer service contacts.
4. Send written demand: If phone calls don't resolve the issue, send a formal written complaint via email and certified mail. Set a clear deadline (14-30 days) for response.
5. Contact the supplier directly: If the dispute involves a specific airline, hotel, or cruise line, contact them directly. They may resolve issues the agency won't.
6. File regulatory complaints:
   • State Attorney General consumer protection division
   • State seller of travel registration authority
   • DOT (for air travel issues)
   • FTC (for deceptive practices)
   • Better Business Bureau
7. Dispute credit card charge: If you paid by credit card and haven't received the services, file a chargeback dispute.
8. ASTA mediation: If the agency is an ASTA member, you may be able to use their Consumer Affairs department for mediation.
9. Send formal demand letter: Cite specific laws violated and damages owed. Set deadline for payment or legal action.
10. Consider legal action: Small claims court for smaller disputes; civil court for larger claims.

ASTA Consumer Affairs

The American Society of Travel Advisors (ASTA) offers a Consumer Affairs department that mediates disputes between consumers and ASTA member agencies:

• Check if your agency is an ASTA member at asta.org
• Submit complaints through ASTA's online portal
• ASTA contacts the agency and attempts resolution
• Free service, though ASTA cannot compel payment

Major Online Travel Agency Policies

OTA	Cancellation Policy	Dispute Process	Key Rights
Expedia	Follows supplier policies; service fees may apply	Online self-service → Phone → Executive escalation	Price match guarantee; 24-hour booking window
Booking.com	Varies by property; free cancellation often available	Message property → Booking.com support	Price match; alternative accommodation if issue
Priceline	Express Deals non-refundable; regular bookings vary	Customer service → Supervisor → Executive	Name Your Own Price is binding; standard bookings flexible
KAYAK	Metasearch only—policies from booking site apply	Contact booking provider directly	Price alerts; comparison shopping
Hotels.com	Follows hotel policy; some prepaid non-refundable	Online → Phone → Executive care	Rewards program; price match guarantee

Calculating Damages in Travel Disputes

Direct Damages

• Trip costs: Full refund of amounts paid for cancelled or unfulfilled services
• Price difference: Cost to rebook comparable travel if agency fails
• Non-refundable losses: Deposits or payments lost due to agency failure

Consequential Damages

• Additional travel costs: Emergency rebooking, transportation
• Accommodation: Hotel costs due to missed connections or cancelled lodging
• Communication costs: International calls, internet to arrange alternatives
• Lost prepaid activities: Tours, event tickets, etc.

Potential Limitations

• Many agency contracts limit liability to the cost of the trip
• Consequential damages may be excluded
• These limitations may be unenforceable if the agency committed fraud or gross negligence

State Consumer Protection Laws

State	Law	Travel Agency Application	Damages
California	CLRA (Civ. Code 1750)	Misrepresentation of travel services	Actual damages + attorney fees
Florida	FDUTPA (Fla. Stat. 501.201)	Deceptive travel sales practices	Actual damages + attorney fees
New York	Gen. Bus. Law 349	Deceptive travel advertising	Actual damages + $50 min + attorney fees
Texas	DTPA (Bus. & Com. Code 17.41)	Deceptive travel practices	Up to 3x damages + attorney fees

Small Claims Court Limits

State	Small Claims Limit	Filing Fee
California	$12,500	$30-$75
Texas	$20,000	$48-$98
Florida	$8,000	$55-$300
New York	$10,000	$15-$20

Frequently Asked Questions

The travel agency won't give me a refund for my cancelled trip. What can I do?

First, determine who cancelled—you, the agency, or the supplier. If the supplier (airline, hotel) cancelled, you're entitled to a refund from them, and the agency should facilitate this. Send a written demand citing DOT regulations for air travel. If the agency is holding supplier refunds, file DOT and state AG complaints. Use credit card chargeback for services not received.

Can I get a refund for a trip I booked through an OTA if the hotel was nothing like advertised?

Yes. If the accommodation materially differed from the description, you may have claims for misrepresentation. Document the differences with photos and contact the OTA immediately. Request a refund or alternative accommodation. If refused, file a credit card dispute for "services not as described" and a complaint with your state AG.

The travel agency went out of business and I've lost my deposit. Can I recover my money?

Check if the agency was registered as a seller of travel in a state with a restitution fund (California, Florida, Washington). File a claim with the relevant state authority. Also file a credit card chargeback if you paid by card. Contact suppliers directly—your reservations may still be valid if the agency forwarded payment.

How long do I have to file a chargeback for a travel purchase?

Generally 60 days from the statement date, but for future travel services, the clock may start from when the service was to be provided. Many credit card issuers are flexible with travel disputes, especially for cancelled trips. Contact your issuer immediately—don't wait until the 60-day deadline.

Can I sue an online travel agency in small claims court?

Yes, but you may need to sue in the state where the company is located or where you entered the contract. Check the terms of service for forum selection clauses. Many OTAs include arbitration clauses, but small claims court is often exempt. The practical challenge is that if the agency is in another state, appearing may be difficult.

What if I bought travel insurance and the trip was cancelled?

File a claim with your travel insurance provider. Coverage depends on your policy and the reason for cancellation. "Cancel for any reason" policies provide the broadest coverage. Standard policies may only cover specific events (illness, death, natural disasters). Review your policy carefully and file within required deadlines.

Resources

• DOT Air Travel Complaints: transportation.gov/airconsumer - For airline ticket issues
• FTC Complaint: reportfraud.ftc.gov - For deceptive travel practices
• State Attorney General: Consumer protection division for state law violations
• ASTA Consumer Affairs: asta.org - Mediation for disputes with ASTA members
• California Seller of Travel: oag.ca.gov - Travel Consumer Restitution Fund claims