Late refunds costs United up to $350,000

Government orders United to pay up to $350,000 for late refunds after 2012 computer problems

Associated Press

WASHINGTON (AP) -- The Transportation Department said United Airlines faces penalties of up to $350,000 for late refunds last year that resulted from big technology problems that angered passengers.

United has to pay $175,000 of the civil penalty right away and the other half if it has further violations, the Transportation Department said on Friday.

After United and Continental merged, the combined airline began using Continental's reservation system. That meant that workers who came from United had to learn Continental's computer system. Because of that and other changes around the same time, some passengers didn't get the upgrades to better seats that they expected, there were problems with award tickets for frequent fliers, and some flights were delayed.

That led to more requests for refunds. United was supposed to send credit card refunds to the processor within a week of getting a request, but some 9,000 refunds were delayed between March and May 2012, the Transportation Department said. The delays amounted to an "unfair and deceptive practice" in violation of the law, the government said.

United has apologized for the problems, and it told the government that it was doing its best at the time and brought in extra workers on overtime to try to process the refunds as quickly as possible.

United was also cited — but not fined — for filing inaccurate reports of mishandled bookings and passengers who were bumped because of overbooking in 2011. It also failed to submit timely reports of incidents involving animals in 2012 and this year. The DOT didn't fine the airline for those violations because United disclosed them itself.

Shares of parent company United Continental Holdings Inc. fell 4 cents to close at $28.46 on Friday.

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