New York Congresswoman Kathy Hochul on Friday questioned U.S. Transportation Secretary Ray LaHood on whether Direct Air complied with federal requirements to sufficiently fund an escrow account to protect consumers and their money.
According to a news release from Hochul's office:
Hochul also urged the Secretary to ensure that debit card users are afforded the same protections as credit card users.
“Western New Yorkers purchased flights to spend the Easter holiday with their families, and once all travel arrangements were finalized they were told Direct Air would no longer be living up to their end of the bargain,” said Congresswoman Hochul. “After speaking with the Secretary of Transportation, I am urging him to work with me and Congressman Higgins to ensure all Direct Air customers are reimbursed for canceled flights and other expenses. We must also verify that all federal rules to protect consumers were followed appropriately.”
While some Direct Air customers have succeeded in obtaining refunds from credit card companies for canceled flights, debit card users may encounter difficulties in securing reimbursements. Federal rules require firms, like Direct Air, to protect customer funds in escrow accounts until they receive the services they purchased.
During their conversation, Congresswoman Hochul thanked Secretary LaHood for the Department of Transportation’s prompt investigation, and asked that he report back any findings so that consumers can be better protected and similar situations can be prevented in the future.
While Direct Air originally stated that flights would resume on May 15, 2012, the company has since filed for bankruptcy and no future flights will be honored. Consumers having trouble obtaining a refund are encouraged to visit Congresswoman Hochul’s website right here for more information.