Connecting state and local government leaders
Legislation in Massachusetts would expand consumer protection laws to require full refunds for student trips that are canceled due to "a declaration of emergency."
Pending legislation in Massachusetts would require companies to refund the full cost of school trips canceled because of the coronavirus pandemic or be open to legal challenges under the state’s consumer protection law.
The bill, discussed Wednesday in a virtual hearing before the legislature's Joint Committee on Consumer Protection and Professional Licensure, would classify as an unfair or deceptive business practice “the failure of any travel company, travel agency, tour business, or travel agent acting on behalf of a consumer, to provide a full monetary refund, upon request, for a school-related educational trip, tour or excursion cancelled as a result of a declaration of emergency.”
The legislation, filed in April with more than 30 co-sponsors, was drafted after the Massachusetts Attorney General’s Office received over 600 complaints from customers who struggled to get refunds for school trips that were canceled as a result of the pandemic.
Those complaints focused on trips booked through EF Educational Tours, a student travel company based in Cambridge, Mass. When travel restrictions disrupted the scheduled trips, the company offered three options to families—travel vouchers to rebook within two years, the ability to transfer vouchers to another student or a refund, minus a $1,000 cancellation fee.
The company settled with the attorney general’s office, agreeing to offer additional funds to customers—$435 for international travel, $300 for domestic travel by air and $100 for domestic travel by bus—who booked trips that were scheduled to depart between March 11 and May 14.
But representatives for the company told legislators Wednesday that full refunds are nearly impossible to secure in most cases. Much of the cost of each trip goes toward planning and research, along with pre-payments to third-party vendors—money that can’t easily be recouped by the company in the event of an unforeseen cancellation, said William Dunn, EF’s general counsel, who testified in opposition of the bill.
“(This legislation) would apply a devastating penalty to travel companies, based on events completely outside of our control,” Dunn said. “Good business actors in the commonwealth would be subject to this penalty...despite there being no intentional wrongful act that could have been avoided. It also fails to acknowledge how much educational travel companies incur and invest in these programs before a traveler ever leaves Logan airport.”
A typical trip can require a year or more of planning, work that “makes these trips seem effortless for these travelers once they’re overseas,” said Liz Rees, senior vice president of sales for Boston-based ACIS Educational Tours. “The planning and staffing costs, plus the costs paid in advance...are either entirely not refundable, or only refunded to us in part, and not in cash.”
Lawmakers seemed sympathetic to that argument, but some expressed concern that it would be difficult for consumers to confirm that their refunds were reasonable without explicit legal protection.
“It is not lost on me. I get it. There is a lot of work that goes into these tours months and years ahead of time, and you should be able to recover those costs and not have to take a complete loss,” said state Sen. Paul Feeney. “But presumably there are some tour operators that aren’t doing the right thing, and absent any legislation trying to figure out what exactly is a violation...I’m stuck trying to figure out, what is that balance? What is a reasonable cost?”
Dunn said that existing consumer protection law already addresses some of those concerns. His company was able to reach a settlement with the attorney general’s office on its own, he added.
“We also believe...this legislation is not needed. Speaking for EF Tours, with the attorney general’s help over the past few weeks, and open and candid dialogue with her office, we have already found a path forward,” he said. “No solution is perfect these days, but we believe in a practical and balanced solution to navigate what we all hope is a once-in-a-lifetime situation.”
The committee did not vote on the proposal.
Kate Elizabeth Queram is a staff correspondent for Route Fifty and is based in Washington, D.C.