Can a travel agency keep my deposit if the trip is canceled?

What the Law Says

New York law does not automatically allow travel agencies to keep deposits when trips are canceled. Instead, it requires transparency, fairness, and compliance with consumer protection statutes.

Under New York General Business Law § 349, it is unlawful to engage in deceptive acts or practices in consumer transactions — including misleading statements about refund or cancellation policies.

The New York Code of Rules and Regulations (15 NYCRR § 201.1) specifically governs travel agencies and requires them to provide written disclosure of all material terms — including cancellation and refund policies — before accepting any payment.

If a travel agency fails to disclose its cancellation policy in writing before you pay your deposit, the policy may be unenforceable, and you may be entitled to a full refund.

Statutory Text

Deceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in this state are hereby declared unlawful.

— General Business Law § 349(a) — Deceptive acts unlawful

Statutory Text

Every travel agency shall, prior to accepting any payment from a customer, provide the customer with a written statement disclosing all material terms and conditions of the travel service, including but not limited to cancellation, refund and change policies.

— 15 NYCRR § 201.1(b) — Written disclosure requirement

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