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What happens to your deposit or OBC if cruise line goes bankrupt?


deeze6
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8 hours ago, deeze6 said:

Given the recent news that cruises are once again suspended there's no doubt one or more cruise lines are going under.

What happens to our deposits / on board credits if your cruise line declares bankruptcy?

Do we lose it all?

 

 

 

You will stand in line with everyone else for $, expect to be near the very back.  

 

 

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5 hours ago, navybankerteacher said:

That’s what heavy odds are all about - unless there is a dead certainty, a faint chance can pay off. A $100 wager (down payment) on a cruise which might not ever sail - but if it does would cost you $5,000 more if you book it later would give you a 50 to 1 payoff. That would make sense if you believed that there was at least one chance in 40 that it did sail.

 

Odds betting always depends upon figuring how unlikely “unlikely” really is.

That would be fine if the game was not "fixed".

 

Many believe the cruise lines are selling cruises that they know will never sail just to get deposits or even final payments. I believe they are waiting to cancel cruises that they know are not going to go to try to collect monies and put off refunding.

 

Our situation was we had a cruise with a refundable deposit for late July with a final payment due in late April .The cruise was supposed to be a Norwegian fjords cruise from London (Southampton.) By late March, I began really doubting this. The UK was quarantining and not allowing people out for non-essential activities like tourism. Norway had closed some of our ports. (Later I learned out hotel was closed.) We cancelled in early April, about 3 weeks before final payment. Princess cancelled about a week and half after final payment was due. I can't believe they had less information than I did. Why did it take them that long to cancel unless they were trying to collect more and postpone refunds. 

 

We're now 70+ days after cancellation, and maybe we will receive it or maybe not. I know I have less faith in getting the refund (luckily small) than I once did. And I would be amazed if it was within 90 days of our cancellation.

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Actually, cancellation of a cruise is really a drastic step to take. They have to take a hit in millions!

I don't think they had any ulterior motive.
It was just very unfortunate that they were forced to cancel due to unavoidable circumstances.

It must have been really tough to make that decision.

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We have been through one cruise line bankruptcy (Regent) when they suddenly went under and had their ships seized at various ports around the world.  That line had about $5000 of our money.  We simply called AMEX and they credited the money back to our account the same day.  A few months later, AMEX, sent us the legal documents that we signed which gave them the authority to try and recover our money (which would go to AMEX) through the bankruptcy system.   Bottom line is that if you live in the USA (different countries have different laws) you can ask for a "charge back" from any major credit card company.  But a charge back would only apply to charges (on that particular card).  Future Cruise Credits would likely be near worthless in a bankruptcy and you would simply be one claimant out of many trying to recover through the bankruptcy system.  If you ever got anything it would likely be pennies on the dollar.  This is why most consumer advocates advise taking refunds (when possible) and not getting involved with FCCs, vouchers, etc.   A future promise to pay (which is a FCC) is only a promise.  A cash refund is cash in the bank!

 

Hank 

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42 minutes ago, ontheweb said:

I can't believe they had less information than I did. Why did it take them that long to cancel unless they were trying to collect more and postpone refunds. 

They didn't have less information than you, they had more........and that was the problem.  Because it's not just cancelling on you (the passengers), it's cancelling on the crew, on the stores, on the fuel, on the docking plans, etc.  They were no doubt trying to get as many ducks in a row as they could with respect to minimizing their losses, making their choices far more complicated.

 

I know of several cruisers waiting 90-100 days before getting their refunds, but they got them.

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Bottom line is that if you live in the USA
In some countries, you can only dispute a Credit card charge if there is a fraud committed.

If you have intentionally paid the company, I don't think you can dispute it, nor will the bank honor your claim.

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3 minutes ago, drsel said:


 

In some countries, you can only dispute a Credit card charge if there is a fraud committed.

If you have intentionally paid the company, I don't think you can dispute it, nor will the bank honor your claim.
 

That is why I was careful to say "USA."  We are covered under the Federal  Fair Credit Billing Act and some other laws/regulations.   Bankruptcy and failure to provide a paid for service are among the things that are generally refunded.  In the past few months we have had to file two charge back requests which were immediately honored.  One case involved a European airline that filed for bankruptcy in March and the other was another European airline (Czech Airlines).  This latter was interesting because that airline recently sent us a short e-mail telling us they had cancelled our August flight from Southampton to Prague.  When we asked the airline for a refund they refused and said they would only give us a voucher.  I immediately called our credit card (Chase) and requested a chargeback and it was immediately granted.  Under both US and EU laws/regulations an airline who cancels a flight and cannot offer an alternative (within a reasonable period of time) must issue a refund!   Like many airlines around the world Czech was trying to pull a fast one and force folks into accepting vouchers.  We have had the same situation here in the USA.  Consumers need to learn the rules and hold their ground.

 

Hank

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1 hour ago, Hlitner said:

We have been through one cruise line bankruptcy (Regent) when they suddenly went under and had their ships seized at various ports around the world.  That line had about $5000 of our money.  We simply called AMEX and they credited the money back to our account the same day.  A few months later, AMEX, sent us the legal documents that we signed which gave them the authority to try and recover our money (which would go to AMEX) through the bankruptcy system.   Bottom line is that if you live in the USA (different countries have different laws) you can ask for a "charge back" from any major credit card company.  But a charge back would only apply to charges (on that particular card).  Future Cruise Credits would likely be near worthless in a bankruptcy and you would simply be one claimant out of many trying to recover through the bankruptcy system.  If you ever got anything it would likely be pennies on the dollar.  This is why most consumer advocates advise taking refunds (when possible) and not getting involved with FCCs, vouchers, etc.   A future promise to pay (which is a FCC) is only a promise.  A cash refund is cash in the bank!

 

Hank 

A promise of a cash refund is only money in the bank when it is received, not one second earlier.

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1 hour ago, ontheweb said:

A promise of a cash refund is only money in the bank when it is received, not one second earlier.

I think you miss my point.  If you opt for a cash refund and never get it you have the basis to seek a chargeback from your credit card.  But once you agree to a FCC, you have no recourse with your credit card company since they do not deal in FCCs.  So when folks were offered the option of a 100% cash refund or 125% FCC, many opted for that FCC thinking that extra 25% was a good deal.  But, in quite a few cases, they have since realized that the price of many future cruises has been increased to such an extent that the extra 25% is really not worth 25%.   And if the cruise line were to go bankrupt that 125% FCC might well be worthless.  

 

Hank

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1 hour ago, sverigecruiser said:

 

We have paid a $1200 deposit on a MSC cruise in July 2021 which we already know will be cancelled. I'm not worried about that because MSC will probably be one of the last cruise lines to go bancrupt. 

I assume you mean July 2020?

MSC is probably the only cruise line that i would feel totally comfortable, accepting FCC.  

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13 hours ago, Hlitner said:

We have been through one cruise line bankruptcy (Regent) when they suddenly went under and had their ships seized at various ports around the world.  

 

 

Regent went bankrupt?  There's a Regent Seven Seas that used to be Radisson.  Is that what you're referring to?

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9 hours ago, Hlitner said:

I think you miss my point.  If you opt for a cash refund and never get it you have the basis to seek a chargeback from your credit card.  But once you agree to a FCC, you have no recourse with your credit card company since they do not deal in FCCs.  So when folks were offered the option of a 100% cash refund or 125% FCC, many opted for that FCC thinking that extra 25% was a good deal.  But, in quite a few cases, they have since realized that the price of many future cruises has been increased to such an extent that the extra 25% is really not worth 25%.   And if the cruise line were to go bankrupt that 125% FCC might well be worthless.  

 

Hank

I was thinking of the cash refund as a chargeback to the credit card it was paid on. And it is not worth anything until it actually shows up on the card. I am still waiting for the chargeback for the refundable deposit on the cruise that we cancelled about a month before the cruise line made public that they were cancelling it. (I cannot believe that they did not know prior to that that they would have to cancel as England where it originated was not allowing non-essential travel and Norway where it went to had already closed some of the scheduled ports. I knew; I can't see how they did not.)

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44 minutes ago, Roz said:

 

Regent went bankrupt?  There's a Regent Seven Seas that used to be Radisson.  Is that what you're referring to?

Sorry mistype on my part.  Should have been Regency!    If you want to add more confusion one of their ships was called the Regent Spirit.  I kid you not :).

 

Hank

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34 minutes ago, ontheweb said:

I was thinking of the cash refund as a chargeback to the credit card it was paid on. And it is not worth anything until it actually shows up on the card. I am still waiting for the chargeback for the refundable deposit on the cruise that we cancelled about a month before the cruise line made public that they were cancelling it. (I cannot believe that they did not know prior to that that they would have to cancel as England where it originated was not allowing non-essential travel and Norway where it went to had already closed some of the scheduled ports. I knew; I can't see how they did not.)

Chargebacks are an ugly situation as we feel bad about sticking it on a credit card company for issues that are not their fault.  Different credit cards handle chargebacks differently.  We have found that the higher-end cards (i.e. AMEX, Chase Sapphire Reserve, etc) are often easier in terms of dealing with these issues.    In nearly all cases that we have ever disputed a charge with those kind of cards, the money is credited back to our card on that same day.  We did recently have one charge back on a Chase Sapphire Reserve card that took about 10 days because it involved a bankruptcy of a European airline.  

 

I should mention that we have never needed to do any kind of credit dispute with a cruise line.  We did have one very expensive HAL cruise cancelled (a 30 day Asian cruise) in late February and HAL credited, in 2 days, the full amount of the cruise and air.  At the time we were surprised that they handled a 100% refund (plus they gave us an additional 25% FCC) so quickly.   Our other 2 cancelled cruises only involved small deposits (Princess) which simply get put back into our Princess account where we always maintain a few Future Cruise  Deposits.

 

Hank

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It goes bye-bye basically. There are some recourses like contacting your credit card company. However, if it has been a long time, they may not assist. As for insurance, it is usually trip insurance and would most likely not cover bankruptcy.

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   Our other 2 cancelled cruises only involved small deposits (Princess) which simply get put back into our Princess account where we always maintain a few Future Cruise  Deposits. 

Hank

Dear Hank, I don't think you should keep any cash with the cruise lines in the form of FCC or otherwise.

The carnival corporation Boss said they have cash to last only for 8 months. That would be from March to October 2020

 

 

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4 minutes ago, drsel said:

 

 

 

 

Dear Hank, I don't think you should keep any cash with the cruise lines in the form of FCC or otherwise.

The carnival corporation Boss said they have cash to last only for 8 months. That would be from March to October 2020

 

 

We hear ya and share your concern.  But the amount of Future Cruise Deposits we keep with Princess is only a few hundred dollars and I would not even think about trying to get those credits refunded at this time.  Princess is completely overwhelmed and working with reduced staff (due to furloughs) many of whom have been working from home.   The financial markets are most concerned about Norwegian Cruise Holdings (NCL, Oceania) but do not seem to be worried about CCL and RCI.  I thought it was interesting that the Saudis made a major investment in CCL and figure they knew a bargain when they saw it.

 

Hank

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2 minutes ago, drsel said:

Hank, I do hope you are right and you are giving me confidence to pay a deposit for cruises in April and May 2021 on carnival and princess

I will be very honest and say that we do not lose sleep over small cruise deposits.  With Princess, using a Future Cruise deposit (purchased onboard previous cruises) means our deposits on cruises is generally $200...even on the longer expensive cruises that we routinely book.  MSC is another cruise line where deposits are very inexpensive.   Oceania did require a pretty substantial deposit, but that would be refundable via credit card charge-back if NCL Holdings were to go belly up.   Because we travel about 6 months a year we view deposits as a necessary evil.  With this COVID-19 thing we have been very fortunate.  We had 10 nights booked in Japan hotels (prior to our cancelled April Westerdam cruise) but they were all booked with points from a major credit card.  When we cancelled those 10 nights we were immediately given back all the points.  We also had 2 internal European flights booked after a cancelled August cruise (from NYC to Southampton).  One of those airlines went bankrupt in March which get us our money back (chargeback) for a non-refundable ticket.  Then about 10 days ago the other airline cancelled our August flight which meant we could get a full refund for that flight.  All our airline flights for the 2 cancelled cruises (and these were very expensive International Bus Class tickets) were booked through the cruise lines (HAL and Princess) so we got all that money back.   We still have an Oct cruise on Princess (28 day) which involves very expensive air (to Rome and home from Singapore) but that cruise is still just under deposit and will likely be cancelled by the cruise line.  Our big final pmt is not due until mid-August so we are not too concerned about that booking.

 

Like you, we have a deposit on an April cruise (Japan to Canada) and do wonder if that trip will ever happen.  But our deposit is relatively small and we will be careful to book all of our hotels with points that would be refundable in the event we must cancel.   Given the current travel situation we do not see any wisdom in booking anything with non-refundable deposits or pre-payments.

 

Hank

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Very simple, you lose your money. As all cruise lines are registered and flagged off shore. So unless you a millionaire who could afford expensive offshore lawyers you will get nothing. That is why Govt has not supported cruising as it pays no taxes and is registered in the e.g. Marshall islands, so little chance of...……...

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2 hours ago, Hlitner said:

Chargebacks are an ugly situation as we feel bad about sticking it on a credit card company for issues that are not their fault.  Different credit cards handle chargebacks differently.  We have found that the higher-end cards (i.e. AMEX, Chase Sapphire Reserve, etc) are often easier in terms of dealing with these issues.    In nearly all cases that we have ever disputed a charge with those kind of cards, the money is credited back to our card on that same day.  We did recently have one charge back on a Chase Sapphire Reserve card that took about 10 days because it involved a bankruptcy of a European airline.  

 

I should mention that we have never needed to do any kind of credit dispute with a cruise line.  We did have one very expensive HAL cruise cancelled (a 30 day Asian cruise) in late February and HAL credited, in 2 days, the full amount of the cruise and air.  At the time we were surprised that they handled a 100% refund (plus they gave us an additional 25% FCC) so quickly.   Our other 2 cancelled cruises only involved small deposits (Princess) which simply get put back into our Princess account where we always maintain a few Future Cruise  Deposits.

 

Hank

I feel the same way about attempting a chargeback with Princess since it was a very small amount and their present problems dealing with all the cancellation refunds. And due to a unique NY state law, we actually got our private insurance money back as a credit on our card. Due to a combination of how small the deposit was and the insurance being somewhat high as we are both senior citizens that refund was actually more than our cruise deposit. So, in a way, I feel like we are still ahead even though Princess owes us a few hundred dollars.

 

OTOH, when Broadway plays were all cancelled and I called the local merchant with whom we had booked a trip to NY City including tickets to Ain't Too Proud to Beg and he said no refunds, I told him that could not possibly apply to he could no longer supply the service. As soon as I mentioned American Express, he changed his stance and said the money would go back to the card.

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