28 April 2020
Instead of refunds, Norwegian has offered its customers airline points called CashPoints. The Consumer Ombudsman points out that, due to Norwegian's current situation, refunds should be only accepted in cash.
The Consumer Ombudsman is concerned about the airline points called CashPoints that Norwegian is offering to consumers as an alternative to cash refunds when the company cancels flights. According to current information, the company is cancelling almost all of its flights for at least one year, even if the company continues to operate. Suffering from financial difficulties, Norwegian will be holding its annual general meeting on Monday 4 May 2020. This meeting will decide whether the airline will be approved for debt adjustment in order to avoid bankruptcy.
– Now is not the time to accept the CashPoints offered by Norwegian, as it is uncertain whether the airline will be providing any flights. According to Norwegian's current terms and conditions, the points will also be valid for one year only. Therefore, refunds should be requested in cash. Consumers should not make any new bookings or transfer flights right now, either. Instead of cancelling a flight yourself, you should wait for the airline to cancel it, emphasises Consumer Ombudsman Katri Väänänen.
The Consumer Ombudsman reminds that, by law, consumers have the right to receive a cash refund whenever an airline cancels a flight. If the journey has been paid by credit card or with credit offered for the purpose of paying the flight, a refund for the payment can be applied from the creditor in accordance with the Consumer Protection Act. The credit company has joint responsibility for the refund and cannot require that the consumer contacts the airline first.
– If an airline goes bankrupt, consumers who have accepted a gift card may lose their right to claim the money back from their credit card company.
The Consumer Ombudsman is monitoring Norwegian's situation closely and will provide more information as soon as it is available.
Request for clarification to Norwegian – consumer rights must be safeguarded even in a crisis situation
The Consumer Ombudsman has also been concerned about Norwegian’s customer communications related to their cancellation practices. According to the observations made by the Consumer Ombudsman, Norwegian has not always informed its customers sufficiently clearly what choices customers have when the airline cancels a flight. Norwegian’s communications have emphasised the company's own CashPoints system, and the refund option has not always been communicated sufficiently early and in a clear way.
The Consumer Ombudsman is currently waiting for clarification from Norwegian.
Further information on the subject: