The European Commission (EC) has cautioned passengers seeking compensation after delayed or canceled flights on carriers from European Union (EU) nations against using third-party claims agencies to progress their cases.

Under EU legislation, passengers can claim for financial compensation under Regulation EU261 against airlines that delay or cancel their flights in all but unforeseeable circumstances.

The compensation can run into several hundred euros per passenger, which has attracted claims agencies that offer to take on such cases in return for a portion of any financial settlement.

The EC, the executive arm of the EU, has now issued guidance alerting passengers pursuing such claims that using an agency is not the most effective way of seeking compensation. It says that passengers should initially approach the airline directly.

The EC points out that national enforcement bodies or alternative dispute resolution organizations can undertake passengers’ cases if airlines decline compensation claims and will do so without taking a slice of any payout.

The Commission also warns that some claims agencies employ dubious practices and that passengers should only employ one if it is transparent about any charges it may impose and has a robust data privacy policy. Travel agents or tour operators must not transmit passengers’ personal details to such agencies, it added.

The move was welcomed by IATA. “Passengers deserve good information about their rights. This guidance clarifies some important issues both for airlines and their passengers on the activities of claim farms, particularly warning against those that resort to fraudulent practices,” IATA VP-Europe Rafael Schvartzman said.

Airlines are in a strongly competitive market, and good customer service is vital. If something goes wrong with a flight, airlines have a strong commercial incentive to put it right.

“A claims agency cannot recreate the relationship between the airline and the customer. Moreover, using a third-party service can result in substantial costs which eat away at the compensation payment. We fully agree with the European Commission that passenger’s first contact should always be with their airline.”   

Schvartzman also noted that claims agencies were a symptom of the problems with the current European passenger rights regime.

“A major reason for the proliferation of these agencies is that the EU261 passenger rights legislation is complex, often misunderstood and inconsistently applied. We hope that the political deadlock, which is currently blocking the revision of EU261, is resolved so that the much-needed revision and clarification of the regulation can proceed, to the benefit of everyone in Europe,” he said.  

Alan Dron alandron@adepteditorial.com