Four of the largest U.S. airlines were given a slap on the wrist by the Department of Transportation for misinforming passengers on how much they paid when the airline bumps them off a flight or loses their luggage. Alaska Airlines and Southwest were fined $40,000; American Airlines was fined $45,000, and United Airlines was fined $35,000. Oh, and the DOT told them all not to do it again. Ouch.
Federal rules say that if an airline bumps someone, it has to put them on another flight that gets them to the destination within an hour of when their original flight lands. If not, the passenger gets a voucher for double the cost of the original ticket. The payment keeps doubling for each hour late, up to $1,350. Permanently lost or damaged luggage is worth up to $3,500. The DOT says about 2.82 of every thousand passengers have their luggage lost or damaged.
Intentionally overbooking flights is common practice for the airlines, who want to make sure the planes are packed full even if some passengers don't show up. When a flight is oversold, the airline is required to look for passengers willing to accept a free voucher for their seat. Still, passengers are occasionally bumped involuntarily. The DOT says less than one of every 10,000 passengers gets involuntarily bumped from flights in the U.S.