US Federal Maritime Commission Investigation - Includes Refunds

[Formula280SS]

 

https://www.seatrade-cruise.com/news/fmc-investigation-hones-cruise-line-refund-policies

 

Basically, the article states there are three areas of the investigation; the funding behind the bonds posted to operate a vessel, cruise refunds compared to other sectors selling transportation and hospitality, and impact of COVID-19 on ports and service providers.

 

One financial aspect about the cruise lines (specifically the top 3) after COVID-19 was how much each used "Customer Deposits" (some portion of such) as essentially free Lines of Credit.  They had so little cash compared to such deposits.

 

Interesting to note, with all of the billions raised by the top 3 recently (debt and equity), that if they had to provide cash refunds they would significantly eat into the funds raised and impair the ability to go revenue-free for 12-18 months.

[allyfrizzle]

Thanks for the article.  I still haven't been refunded for the Feb 23rd - March 1st cruise we took that ended up being a bit of a disaster.

I saw your signature... were you able to cancel your March 2020 cruises with no penalty/full refund or FCC? If that was an option when I sailed, we'd have gone that route rather than taken the cruise.

[julig22]

It is interesting that NCL is returning "deposits" - meaning payments prior to final payment deadline - very quickly, usually within a couple of weeks.  Part of that could be just that they have the mechanism in place to do that, but I'm thinking there may be a little more to it.  If it was simply a matter of interest-free loans, they would have no reason to return deposits any faster than full-payments for cancelled cruises.  I did see somewhere that withholding payments for 90 days might have something to do with the financing deals that NCL (and all the other cruise lines) are making.

Edited May 28, 2020 by julig22

[Formula280SS]

3 minutes ago, allyfrizzle said:

Thanks for the article.  I still haven't been refunded for the Feb 23rd - March 1st cruise we took that ended up being a bit of a disaster.

 

Well, it looks like opportunity to weigh in with regards to your experience.

 

https://www.fmc.gov/contact/

 

It would appear to be the first chance to do such.  There have been so many with really difficult issues with cash refunds maybe this is the chance to consolidate experiences with such investigation.

 

3 minutes ago, allyfrizzle said:

I saw your signature... were you able to cancel your March 2020 cruises with no penalty/full refund or FCC? If that was an option when I sailed, we'd have gone that route rather than taken the cruise.

 

Actually, we simply let the deposit expire completely unrelated to COVID-19. 

 

We cruised so much in November and December (and it was beautiful on NCL's Bliss in the Haven 21-Day and MSC Meraviglia Yacht Club B2B) and we had reserved an ocean front winter rental for the first time on a barrier island in the central east coast of Florida that we had decided to take a break from winter cruising.

 

Just luck.

 

For the 1st time in years, we have no future cruise reservations.

 

 

[joeyancho]

Ponzi scheme 

[hallux]

1 hour ago, joeyancho said:

Ponzi scheme 

Not quite.

 

Definition - a form of fraud in which belief in the success of a nonexistent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors.

[Até]

The latest (2013) Federal Maritime Commission's requirement for cruise lines to protect "Unearned Passenger Revenue", deposits and payments, was capped at $30 million, a very small percentage of each of the major lines actual amount.  Any proposed change in that bond requirement will be bad news for the industry.

 

https://www.federalregister.gov/documents/2013/02/27/2013-04417/passenger-vessel-operator-financial-responsibility-requirements-for-nonperformance-of-transportation

[Formula280SS]

1 hour ago, Até said:

The latest (2013) Federal Maritime Commission's requirement for cruise lines to protect "Unearned Passenger Revenue", deposits and payments, was capped at $30 million, a very small percentage of each of the major lines actual amount.  Any proposed change in that bond requirement will be bad news for the industry.

 

https://www.federalregister.gov/documents/2013/02/27/2013-04417/passenger-vessel-operator-financial-responsibility-requirements-for-nonperformance-of-transportation

 

Thanks for the information and reference.  I could never find applicable laws or regulations re: such.

 

QUESTION

 

Do you think this is an opportunity for cruiser's to actually communicate the specifics of what has happened during the past almost 3 months?

[Até]

12 minutes ago, Formula280SS said:

Do you think this is an opportunity for cruiser's to actually communicate the specifics of what has happened during the past almost 3 months?

Sure, they seem to be mainly interested in industry opinions and might not put much weight on an individuals thoughts but I can't see it hurting, especially if they got tons of public comment.  The Fact Finding 30 investigation gives email addresses for comment and problems.  Your post #4 shows most of them, the specific page asking for input would be:

 

https://www.fmc.gov/fact-finding-30/

 

The inquiry document:

 

https://www2.fmc.gov/readingroom/docs/FFno30/ffno30_ord.pdf/

[joeyancho]

4 hours ago, hallux said:

Not quite.

 

Definition - a form of fraud in which belief in the success of a nonexistent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors.

Correct, but you get my drift. 

[Formula280SS]

13 hours ago, Até said:

Sure, they seem to be mainly interested in industry opinions and might not put much weight on an individuals thoughts but I can't see it hurting, especially if they got tons of public comment.  The Fact Finding 30 investigation gives email addresses for comment and problems.  Your post #4 shows most of them, the specific page asking for input would be:

 

https://www.fmc.gov/fact-finding-30/

 

The inquiry document:

 

https://www2.fmc.gov/readingroom/docs/FFno30/ffno30_ord.pdf/

 

Thanks Ate.

 

Those with experiences with refunds have a contact point.  Posting on CC is obviously noteworthy, but to influence change going forward, this would appear to be the opportunity.

[Formula280SS]

On 5/29/2020 at 6:32 AM, Formula280SS said:

 

Thanks Ate.

 

Those with experiences with refunds have a contact point.  Posting on CC is obviously noteworthy, but to influence change going forward, this would appear to be the opportunity.

 

Well, it kind of looks like all the posts about the terrible inability to get cash refunds is 'hot air.