October 6, 2016 Page 7 Finance College and Credit Cards: How Parents can Play Professor It Pays for Airline Passengers to Know Their Rights By Rob McCarthy A recent investigation at U.S. airports discovered a practice by several airlines of understating the amount of compensation they owe for “bumping” passengers from overbooked flights and for mishandling their bags. A Department of Transportation task force found that Alaska, American, Southwest and United airlines gave ticketed passengers at the nation’s airports incorrect information about their rights to compensation. At least one airline told passengers they were entitled to a maximum of $2,500 for lost, missing or delayed luggage when federal aviation consumer-protection law states the amount is $3,500. The department levied $160,000 in fines against the carriers, which were ordered to stop the false and misleading practice against consumers. The enforcement action also served as a reminder that airline passengers who’ve purchased a seat on a domestic or international flight have certain rights. “We are committed to ensuring that air travelers know the rules and have accurate information about compensation when they are bumped from flights and for lost, damaged, or delayed baggage,” U.S. Transportation Secretary Anthony Foxx said Aug. 26 in an announcement about the task force findings. Federal rules say that passengers who are bumped involuntarily from an oversold flight are eligible for compensation. The transportation department requires each airline to give those passengers a written description of their rights and the airlines’ policy for deciding which passengers on an oversold flight are bumped. The airlines must first ask for volunteers to give up their seats on the flight, under the rules. Most airlines overbook their scheduled flights to compensate for no-show passengers who miss their flights. The practice is legal under federal aviation rules, though airlines must have copies of their policy at all airport ticketing and boarding locations. Any ticketed passenger or person may ask for a copy. No compensation is due when a passenger is bumped involuntarily and the airline arranges other transportation that is scheduled to reach their final destination within one hour of the customer’s original scheduled arrival time. Passengers who will arrive at their destinations more than an hour late after being denied boarding on an oversold flight must be compensated, under aviation consumer-protection rules. After the airline arranges for alternate transportation for someone involuntarily bumped, they owe a passenger who is: - One to two hours later than the original arrival time - triple the one-way fare price up to $675, p a y a b l e t h e same day. This also applies for a delay of one to four hours on an international flight. - More than two hours later than the original scheduled arrival t i m e - 4 0 0 percent of the oneway fare with a Airlines are required to have copies of bumping and baggage policies at ticket counters. $1,350 maximum. This also applies to international travelers four hours or more behind schedule, or if an airline doesn’t make alternate transportation available. In both cases, a frequent-flier passenger holding a ticket without a fare amount would receive the lowest fare amount in the same class on the oversold flight. Any forced-bumped flier gets to keep the original ticket to use again, and airlines must refund any inconvenienced passengers who make other travel arrangements after being denied boarding. The U.S. consumer-protection rules also extend to baggage that goes missing or turns up damaged. Airlines are liable for up to $3,500, and they must explain their policy and the dollar amount on tickets they issue to all passengers. A consumer guide for air travelers, posted at the U.S. Department of Transportation web site, stresses that all damage to bags or contents must be verified, and the airline may dispute a claim for broken contents in a bag. “If your suitcase arrives smashed or torn, the airline will usually pay for repairs. If it can’t be fixed, they will negotiate a settlement to pay you its depreciated value. The same holds true for belongings packed inside,” it says. “Airlines may decline to pay for damage caused by the fragile nature of the broken item or inadequate packing, rather than the airline’s rough handling. Air carriers might also refuse to compensate you for damaged items inside the bag when there’s no evidence of external damage to the suitcase.” Agents with the Office of Aviation Enforcement and Proceedings s h o w e d u p a n n o u n c e d a t a i r p o r t s n a t i o n w i d e , and asked ticketing and boarding agents for copies of the airlines’ written denied boarding statement. The airline employees gave the federal agents written material that was outdated by five years in some cases, according to the transportation department. Information in the terminals and printed on boarding passes understated how much ticketed passengers were entitled to receive if they got bumped for their flights. The department said signs and printed tickets were three years out of date. Alaska Airlines told department investigators that it was in the process of updating signs about the higher $3,500 baggage-liability limits when the agents visited in August 2015. Alaska said it has since replaced the outdated signs and ticket information to comply with the law. Long delays on the tarmac inconvenience airline passengers, and so they are restricted under the department rules, too. U.S. airlines cannot hold a domestic flight on a tarmac beyond three hours without giving passengers a chance to leave the airplane. The time limit is four hours for international flights. The airlines must provide adequate food and water during the long delays, along with restrooms and medical attention, if necessary. Passenger safety, security or air traffic control reasons are exceptions to the tarmac-waiting rule. A separate section of U.S. airline law prohibits discrimination in air travel based on a person’s disability. The Air Carrier Access Act balances the rights of people with disabilities to fly commercially while giving airlines some leeway to prepare to accommodate disabled passengers who need medical assistance. The rights of disabled passengers and responsibilities of the airlines are explained at the Department of Transportation web site. Type in “About the Air Carrier Access Act” in the search window to find the information. Consumers have the right to file complaints with an airline, and to expect a written response to their concerns. Federal rules require carriers to explain how to file a complaint. Their policy must appear on their web sites, on all e-ticket confirmations, and upon request at any of the airline’s ticket counters or gates. An airline must acknowledge a passenger complaint within 30 days and respond in detail within 60 days of the date the complaint was lodged. Passengers are advised to give their airline a chance to resolve a complaint before getting the Department of Transportation involved. The airlines have customer service agents at airports to troubleshoot when passengers are stranded, denied boarding compensation, or their luggage is late or goes missing. The department says that an airline passengers should keep notes about an incident, including when it happened and the names of airline employees who were contacted. It’s important when filing a complaint to have the ticket or confirmation, baggage check stubs, and boarding pass. Also, passengers should keep receipts for out-of-pocket expenses that were incurred as a result of the airlines’ actions. • (BPT) - Last year, college campuses across the country had 2.1 million recent high school graduates walk through their doors - a number that will likely be matched in 2016. But a freshly printed campus ID isn’t the only plastic eager students will carry this fall. A recent survey commissioned by USAA found that as parents send their children to college, most make sure their kids pack at least one credit card in their wallets. Parents cite a number of reasons why their child has a credit card. Most overwhelmingly, the primary reasons are the ability to build credit history and convenience. However, one-third of parents surveyed say their children will not have a credit card in college. JJ Montanaro, a certified financial planner with USAA, encourages parents to reconsider if they feel credit cards might be unnecessary. “College is a place to learn - whether it’s academics or life lessons,” he says. “Building a credit history and understanding of how to manage credit should be a part of the overall college experience.” Montanaro offers parents this syllabus for helping their college students make the grade in Credit Cards 101: Communicate Expectations Surprisingly, parents say they are just as likely to discuss budget management as they are academic priorities with their collegebound child (both 82 percent). This is great news, but Montanaro encourages parents to lay a good financial foundation well before their kids are headed off for higher education. Before college, parents should teach their children the basics of setting a budget and following it. Select the Right Card Since the 2009 CARD Act, it is more challenging for students to get a credit card without mom and dad’s help. Parents report that nearly 50 percent of college credit card holders are authorized users on their account or using a card they have co-signed for. “It’s a great idea for the student to have a card to which the parent has access and visibility,” says Montanaro. “Keeping a clear line of sight into how the card is used and paid each month allows parents to help young adults learn from their mistakes and create successful money and credit management habits.” For students who still need training wheels, a secured credit card can be a good option. When they apply for one of USAA’s secured cards, they’ll also open a USAA Bank two-year variable rate Certificate of Deposit (CD), which allows them to earn interest while helping to build a positive credit history. Master the Fundamentals While there are many benefits of having a credit card in college, irresponsible use can have lasting consequences. Montanaro suggests using a credit card for recurring charges, like cell phone or internet service, as a safe way for students to build credit. Once they are ready to charge a wider array of expenses, both parents and children must abide by the most important rule: Pay off the card in full each month. Learning to responsibly use credit cards while in college can have many benefits. In the short term, it allows students to build a positive credit history in order to purchase a car or rent an apartment once out of school. Longer term, they can carry positive credit management habits with them throughout their lifetimes. Montanaro sums it all up, “Allowing your kids to dip their toes into the world of credit cards while you’re able to closely monitor the situation provides an opportunity to learn and the freedom to fail without big stakes.” [1] Source: http://www.bls.gov/news. release/hsgec.nr0.htm Disclosures: Purchase of a product other than USAA auto or property insurance, or purchase of an insurance policy offered through the USAA Insurance Agency, does not establish eligibility for or membership in USAA property and casualty insurance companies.• Certified Financial Planner Board of Standards, Inc. owns the certification marks CFP® and CERTIFIED FINANCIAL PLANNER ™ in the United States, which it awards to individuals who successfully complete the CFP Board’s initial and ongoing certification requirements. Secured credit card and certificate of deposit provided by USAA Savings Bank, Member FDIC. •
MBSun_100616_FNL
To see the actual publication please follow the link above