Iceland Car Rental charged my card and my refund is missing

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When Kristen Nelson cancels her trip to Iceland in 2020, her rental car reimbursement is frozen. The car rental company wants her to accept a credit. Can it do that?

Question

I am trying to get a full refund from Iceland Car Rental for our trip to Iceland in August 2020 which was canceled due to COVID. At the time we booked the rental, March 2020, they offered a “100% money back” guarantee. We notified them to cancel our reservation as soon as our flight was canceled in July 2020. Can you help me get my $545 back? — KristenNelson, Minnetonka, Minn.

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Responnse

It shouldn’t have happened. Most car rental companies don’t charge you until you collect your car. I’ve looked at the terms of your agreement with Iceland Car Rental, and it works a little differently. If you cancel your reservation up to two days before the pick-up date, you are entitled to a “100% refund”. If you are within the 48 hour cancellation window, they will charge you for your rental.

You canceled before two days, so you should have received your money. So why didn’t you?

A representative from Iceland Car Rental has attempted to explain this to you in an email. “The coronavirus outbreak has resulted in thousands of cancellations,” he explained. “It means that many people have asked for refunds, including you. Each reimbursement request is treated individually. And with the large number of cases we are currently processing, the waiting time is currently too long.

But after asking how long it could last, you got a different answer.



“As is the case with many tourism-related businesses around the world, the future of our business has been secured through this difficult period through a survival agreement with our bank,” the company noted. “However, the financial restructuring of the company could not include refunds of reservations in progress for the foreseeable future; therefore, we will not be able to refund your booking.

Here is your refund from Iceland Car Rental

That seems like a different argument. The car rental company was being restructured, meaning the old company – the one you booked with – technically no longer exists. Iceland’s new car rental apparently didn’t feel it had to honor some of the old company’s obligations.

But the car rental in Iceland you were dealing with shouldn’t have charged your card in the first place. I think you would have had a legitimate case for a credit card dispute, had you come to this. (You can learn more about how to properly file a credit card dispute here.)

This was not the case. I contacted Iceland Car Rental on your behalf and they issued a full refund.

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