Nevada Attorney General Announces Sweeping Settlement with Norwegian Cruise Line

A large corporation, a public health emergency, and a sales team instructed to keep the phones ringing at all costs are all eerily familiar. In the spring of 2020, when the world was shutting down port by port and NCL representatives were allegedly informing concerned customers that the coronavirus couldn’t survive in tropical temperatures, that is essentially what happened with Norwegian Cruise Line.

To put it simply, it was untrue. Years later, a coalition of twelve state attorneys general, including Nevada’s, announced a broad multi-state settlement that would hold the company responsible for what investigators claim were false and misleading consumer communications during one of the worst public health emergencies in contemporary history.

The agreement was signed by the offices of the attorneys general of Connecticut, Florida, Illinois, Louisiana, Minnesota, North Carolina, New Jersey, Pennsylvania, Texas, Utah, and Wisconsin. The company at the heart of the investigation, NCL Bahamas, Ltd., has agreed to pay them $2 million. Based on the number of consumer complaints filed, the funds are distributed among the states.

For example, Connecticut received slightly over $65,000 for just 39 complaints, while New Jersey received close to $139,000. For a business the size of NCL, it isn’t a huge financial penalty, but in the long run, the structural requirements associated with the settlement might be far more significant.

There is more to this case than just the monetary amount. It depicts how a travel agency acted when clients, many of whom were elderly people who had saved up for ideal trips, attempted to cancel reservations as hospitals filled up. Investigators discovered that by relaying medically questionable claims, NCL’s customer-facing staff occasionally actively discouraged cancellations. It’s difficult to ignore the specific cynicism in that: employing reassuring language to safeguard profits rather than people.

Perhaps the most direct statement was made by New Jersey Attorney General Jennifer Davenport, who stated that businesses shouldn’t be allowed to exploit customers, particularly in times of public health emergency. For years, her office, Nevada’s, and the coalition’s built a multistate investigation that ultimately brought NCL to the table.

For its part, the company has now given customers all over the country credit card refunds totaling more than $2.6 billion and future cruise credits totaling about half a billion dollars. The settlement does not completely address the question of whether those credits were always regarded as just compensation, considering that some passengers had no desire to cruise again.

The terms mandate that NCL provide employees who deal directly with customers with mandatory training going forward, with an emphasis on accurate sales communications. More importantly, senior management must approve consumer-facing sales messaging before it is distributed during any future disaster declaration.

If it is truly enforced, that is a significant barrier. There’s a feeling that the true test of this settlement won’t take place in a courtroom, but rather the next time the cruise industry is disrupted by a pandemic, natural disaster, or geopolitical event, and someone at headquarters must choose whether to tell the truth or continue making reservations.

For a company that handled billions of refunds, it’s still unclear how much behavioral change a $2 million settlement actually forces. However, this announcement probably has some significance for the travelers who complained, waited on hold, and battled for money they were due during one of their most trying times. Perhaps insufficient. However, something.