Gone are the days when life was simple. Common sense, respect, and compassion meant something. In today’s society, many corporations seem to be driven solely by greed, and they get away with extortion through legally binding contracts. How did we get here?
In today’s society, many corporations seem to be driven solely by greed, and they get away with extortion through legally binding contracts.
The basis of my frustration stems from a very simple concept.
A person or company provides a good or service and gets compensated for that good or service.
If every company followed this simple logic, the world would be a better place. However, somewhere along the way, greed took over. Contracts that were once meant to protect the company became a catalyst for legal extortion, forcing customers to pay for goods or services that are not provided.
There are certain circumstances where it makes sense to charge a cancellation fee. For example, if a good or service is cancelled and the company providing that service has incurred costs due to the cancellation, it seems rational to pass the expense (or a portion of it) on to the consumer. The problem is that common senses no longer factors into these situations.
A common place we see this extortion is with airlines. If you purchase a seat on a flight, the airline is assuming that the seat will be filled. If you cancel that seat, the airline may or may not be able to resell that seat and they have a potential loss. Therefore, they have contracts in place to protect them. However, once they introduced policies that prevented the consumer from changing the name of the passenger in the seat, it became legal extortion. It is no longer about recovering potential loss, but rather making a profit on a customer’s misfortunes. Large companies only care about profit and will extort customers to get it by adding unjust policies into their contracts.
It is no longer about recovering potential loss, but rather making a profit on a customer’s misfortunes.
Recently, this extortion through airlines got even more out of hand. Before 2023, you could receive a credit for your cancelation that could be transferable to someone else. In 2023, major airlines updated there policies so only the person with the original ticket can receive a non-transferable credit. They have also updated fare structure so the base price offers no compensation to the consumer. You are now forced to pay additional fees with built-in insurance policies that allow you to cancel. There is also NO option to transfer your ticket to another person, no matter what fare type you purchase.
This issue with transferring names is not just limited to airlines. Cruise companies have been doing the same thing for years! If you pay for a stateroom on a ship, you have to provide the name of the passengers. If plans change and those passengers are unable to go, cruise lines will NOT allow you to change the names of the passengers. There is no logic behind this practice other than greed. A name change should not affect the service provided! However, the only “solution” for this scenario is to spend a couple hundred dollars to pay for insurance to allow you to “cancel” and “rebook” at a the current rate rather. It is not possible to transfer the service. This policy legally allows the provider to extort customers by forcing them to forfeit their money, theirby allowing the company to resell the room and increase their profit.
A name change should not affect the
good or service provided!
This leads me to the ridiculousness of insurance policies.
Insurance is meant to cover the costs incurred in the unexpected event that a good or service must be cancelled.
An insurance policy should only be implemented and purchased up to the time that a cost is incurred. However, it has gotten so out of hand, that some companies force you to purchase this coverage at the time sale to cover situations where no expenses have even been incurred by the company providing the service or good!
An example is when we signed our daughter up for a school field trip to Europe 14 months before the trip was to take place. The school forced us to purchase insurance on this trip at the time of sale (an extra $200). Three months later (11 months before the trip) we decided to pull out. By this time, enough students had signed up that they were able to go ahead with the school trip regardless of our enrollment, and several students had not yet enrolled. We tried to give our spot to another student. However, the company planning the trip would not allow us to transfer our enrolment or receive a refund. We were forced to pay a large chunk upfront, but no expenses had been incurred yet by the travel agency. They hadn’t event finalized the trip details or booked the flights.
In 2023, this particular company added a new clause to their contract stating that you only have 1 week from the time of purchase to cancel your enrolment, no matter how far in advance you enroll. I believe the purpose of this clause is because airlines no longer allowed name changes on seats. Therefore when planning group trips, you can’t simply resell a ticket. I don’t agree with it, but at least this is a logical explanation. It is also not common that a trip is planned so far in advance.
In our case, the flights weren’t even available for purchase yet! Even then, I spent countless hours on the phone with customer service trying to get my money back. In the end, I was out of pocket almost $500 for the cost of the cancellation insurance and trip interruption insurance (which was originally included at no extra cost as an early signing bonus). Neither of these policies even came into effect and should have only been purchased once flights were booked.
This issue is not just limited to the travel industry. We see it among many different fields, especially phone and internet providers, and software providers. Any company that forces the customer to sign contract for a set time with no option to end the contract if services are not provided are all practicing legal extortion.
The bottom line is simple…
Businesses should be expected to receive payment for the goods or services they provide. If a consumer is unable to use the service, they should have the right to transfer the good or service to someone else. If a service is not provided, or the service is not what was sold, the consumer should have a right to cancel their service at any time. A cancelation fee should only be charged if an expense was incurred by the provider.