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Notice to Cruise Passengers

Due to the recent bankruptcy of several cruise lines, and the resulting impact on involved passengers, the Federal Maritime Commission ("Commission" or "FMC") is issuing this advisory notice to explain its jurisdiction and responsibility over cruise lines, and to provide useful information to the cruising public. Additionally, each year the Commission receives numerous complaints and inquiries from cruise vessel passengers and prospective passengers regarding various problems they have encountered in dealing with cruise lines. Accordingly, the information set forth below should help to answer common questions and assist passengers as they plan prospective cruises.

I. THE ROLE OF THE FMC

The FMC is responsible for ensuring that passenger lines maintain sufficient financial coverage to indemnify passengers in cases of nonperformance of the voyage, or for instances of injury or death on voyages. Separate protection must be obtained to cover nonperformance, and then additional coverage is required for liability against injury or death. Passenger vessel owners normally establish their financial responsibility by means of a bond or guarantee. Note that the Commission's statutory authority is limited to vessels that board passengers at U.S. ports - we have no jurisdiction for cruises that originate outside of the United States. This applies to air/sea packages as well, i.e, we have no jurisdiction in cases where a passenger flies out of the U.S. and then boards a vessel at a foreign port. Also, only vessels with berth or stateroom accommodations for 50 or more passengers are required to demonstrate their financial responsibility.

It is important to know that the Commission has no authority over:  passenger line vessel operations, safety issues, amenities on board vessels, or fare levels. Additionally, we are not the entity that provides refunds in cases of nonperformance - any such claims must be filed with the company that provided the bond, guaranty, etc., for the passenger line. In such instances, the FMC can provide pertinent information about applicable coverage.

Nonetheless, the Commission is pleased to review any problems or inquiries that passengers bring to its attention. The Commission's Office of Consumer Complaints ("OCC") will contact a cruise line on a passenger's behalf. However, it must be emphasized that the final resolution of such complaints or inquiries is a matter between the cruise line and the individual. The role of OCC essentially is to help ensure a quick and fair consideration of the issues involved.

II. CRUISE LINES' LEGAL OBLIGATIONS

Ordinarily, by booking a cruise, a passenger has entered into a contract with the cruise operator. The terms and provisions of the contract are contained in the cruise operator's passenger ticket contract. Although contracts differ in detail among the various lines, one important characteristic is fairly common:  the contracts invariably grant the cruise lines wide latitude in all matters involving both operations and customer relations. To the extent that passenger complaints encompass claims for financial reimbursement or other forms of compensation, the terms of a passenger ticket contract ordinarily will govern the obligations of the cruise line. If a line's decision comports with the terms of the ticket, it usually is enforceable. The Commission has found that courts often have enforced passenger contract provisions when presented with disputes. Again, the Commission does not have jurisdiction to address disputes over these contracts, but is happy to contact a cruise line on a passenger's behalf.

As a matter of information, following are some examples of typical clauses that might be encountered in a passenger ticket contract:

1. Cruise Cancellations. The ticket contract usually specifies cancellation refund schedules. The percentage of cruise fare refunded to the passenger depends strictly on the number of days prior to sailing that the passenger cancels. These schedules are enforced strictly in almost all circumstances, regardless of what passengers may believe to be justified reasons for exception to the rule.

2. Port Call Changes. Cruise lines generally retain the right to drop ports or deviate from their advertised routes. Such changes can happen for a variety of reasons, and cruise lines retain full discretion in making such decisions. This is important to keep in mind if a passenger has special plans at, or an attraction to, a certain port, since the possibility exists that this port may not be called.

3. Compensation for Damage to Personal Property. Such compensation likely is limited to a small fraction of actual value, and the contract may place on the passenger the burden of demonstrating negligence. Such limitations of liability may be governed by provisions of U.S. or other law.

4. Air/Sea Packages. An airline selling tickets to passengers as part of a land/sea package may be characterized as an independent contractor, permitting the cruise line to disclaim all responsibility for an airline's failure to convey passengers to the port of departure in a timely manner. Accordingly, if you miss your sailing due to flight delays, the carrier may not be responsible for any reimbursements or in assisting you in getting subsequent boarding on the vessel. This may be the case even when the cruise operator selects the airline and arranges the bookings.

5. Medical Personnel/Concessionaires. Passenger vessels are not required to carry a ship's doctor. However, most, if not all, oceangoing vessels today do provide a doctor and medical facilities. Passengers concerned about medical services should consult their travel agents or the cruise line for the particulars of any medical services provided. Additionally, medical personnel, as well as those providing concession services on a vessel, also may be characterized as private contractors, and the contract may disclaim responsibility for such contractors' actions and omissions. It would be prudent to have a full understanding of existing liability prior to using the services of such individuals.

6. Compliance with Applicable Laws/Regulations. The ticket contract normally makes passengers themselves responsible for complying with all U.S. and foreign Customs' laws. Therefore, it is important to have explicit knowledge of what will be required of you. Many of these laws are strictly enforced with no exceptions or waivers, e.g., only certain items are acceptable to demonstrate U.S. citizenship. And, while a cruise line may offer informal advice, such advice should be confirmed, since the cruise line will not be responsible for providing erroneous information.

To alleviate some of the misunderstandings involving terms of the ticket contract, and to help ensure a pleasant and satisfying cruise experience, passengers are encouraged to obtain a copy of the contract either from the travel agent or from the cruise line itself before booking a cruise. Examine the provisions of the contract and discuss any concerns with a knowledgeable travel agent, with experienced cruisers, or with the staff of OCC.

III. ADDITIONAL SAFEGUARDS

Passengers do have certain options available to protect their financial investment. Set forth below are 3 specific examples:

1. Travel Insurance. Many passengers purchase travel insurance. However, it is important to know exactly what your insurance is covering. In general, travel insurance will cover passenger cancellation for specified reasons, such as illness, or various family emergencies. Policies can vary, and, of course, more expensive policies likely provide a wider range of benefits. In light of the aforementioned recent cruise line bankruptcies, individuals might wish to ascertain whether a particular policy covers such risks. Travel insurance can be purchased through a cruise line, travel agent, an independent broker, or directly from an insurer. In some instances, the cruise lines may sell coverage from affiliated insurers. In any case, the purchaser should determine the policy's provisions carefully to ensure they are adequate.

2. Cruise Cancellation Waivers. Certain cruise operators sell this type of coverage to their customers. They are not insurance policies. Instead, for a fee, the cruise line will waive the cancellation schedule and refund the entire fare to the customer in some circumstances. Be sure to understand the terms of such waivers. For example, some waivers expire 24 hours prior to sailing, meaning that purchasers forced to cancel a few hours prior to sailing would not be entitled to a refund.

3. Credit Card Purchases. As a precaution, ticket purchasers might wish to consider paying for their tickets with a major credit card. Some credit cards may provide passengers with protection that would not be available for debit cards or cash payments. In the few cruise line bankruptcies experienced in recent years, those passengers who paid by credit card, or who obtained third-party insurance, generally have been able to obtain a quicker refund. In one specific instance, cash paying passengers with no insurance obtained no refund, while those with insurance and those who had paid by credit card did receive refunds.

IV. OTHER ENTITIES THAT CAN PROVIDE ASSISTANCE

  • The U.S. Coast Guard is concerned with safety-related matters. You may contact the Coast Guard, Marine Safety Office, that is responsible for the Control Verification Examination of the ship. Interested persons can get a referral to the appropriate office by calling Coast Guard's toll free customer hotline: 1-800-368-5647. Persons concerned with security procedures or issues also may call the same number.
     
  • The Vessel Sanitation Program, National Center for Environmental Health, may be contacted concerning unsanitary conditions on a cruise ship. This organization's number is: 1-770-488-7070.