I live in Denver, Colorado. My flight had 3 legs. The first was from Denver to San Francisco, the second was supposed to be from San Francisco to Lima, and the third was supposed to be from Lima to Cuzco.
Here is a more detailed account of what happened (letter to credit card company):
Andrew Trapanese and Erin Mack Trapanese
807 W. 4th Avenue
Denver, CO 80223
Account Ending in: 4622
Case # XXXXX
February 2, 2011
To Whom It May Concern:
This letter is in regards XXXXX XXXXX number # XXXXX My husband Andrew and I would like to disagree with the dispute resolution communicated to us in a letter from FIA Card Services dated January 24, 2011 on the grounds that it is within our legal rights to receive a full refund for the loss of our trip to Peru carried by LAN Airlines and that we have done everything within our power to secure this refund and have not been helped.
On December 18, 2010 Andrew and I checked into our flight to Cuzco that originated in Denver. We were told that although our baggage could be ticketed through to our final destination in Cuzco, we were to check in when we arrived in San Francisco (In San Francisco we would board a flight to Lima and then from Lima we would fly to Cuzco); checking bags to a final destination without ticketing passengers through is not standard practice and should have tipped us off that something was amiss, but as it was early in the morning and we were excited for our trip to begin we did not inquire further. We arrived in San Francisco delayed by weather on a flight purchased by LA N from United. Although delayed, we should have had plenty of time to make our flight as we had been dropped off in the international terminal and had just under an hour (53 minutes) to make our flight from San Francisco to Lima, which is a standard layover (even without weather delays) for such flights as evidenced by this booking on a similar flight via Aero Mexico (Please see Attachment #1). It should also be noted that the flight left 20 minutes late, which should have left us plenty of time to catch our flight (Please see web link below).
When we arrived at the LAN counter, we rushed immediately a desk with a customer service agent who was not helping any customers and explained that while we do not typically engage in the practice of cutting lines, we wondered if the agent would be so kind as to provide us with a ticket (we already had a paid reservation) so that we could make our flight to Lima. The customer service agent gestured to the line of approximately 30 passengers and told us that all passengers in line were waiting for the same flight and that we should expect to join them in line). While we were waiting, our suspicions from the morning that our flight had been oversold were confirmed. LAN agents not only moved at an excruciatingly slow pace (which seemed unusual as the flight was departing in 53 minutes), asked if there were any singles in the line (and on 2 separate occasions and pulled individuals out of line) and held the plane past the scheduled departure time of 11:45 in order to ensure those who they could ticket were boarded, (http://www.flightstats.com/go/FlightStatus/flightStatusByFlight.do?airline=%28LA%29+Lan+Airlines&flightNumber=2609&departureDate=2010-12-18&x=0&y=0) but left us and 4 other passengers in line when all was said and done.
As LAN shares a counter at San Francisco International with another airline, they prepared to close without speaking to the remaining passengers. However, Andrew insisted that we be helped and we were finally offered a flight that would depart 2 days later to Lima (which was not our final destination and would get us in 3 days later than anticipated on an 8 day trip (even if we could find a flight to Cuzco from Lima) because of international time differences). When I insisted that this would not work because our purpose for the trip was to participate on a trek to Machu Picchu in Cuzco, we were told that since United had gotten us in late, United would have to fly us to LA where we could catch a same day flight to Lima (Lima was again, not our final destination and at no point did anyone at LAN offer to get us to Cuzco, our final destination). As LAN employees were packing up the counter and we did not know what our options were in full before talking to United, Andrew asked how we could reach LAN once we had decided in order to be booked on a flight. The LAN agent provided us with a number(XXX-XXX-XXXX) and ensured us he would “come right down” and help us from the LAN offices upstairs when we decided what to do, provided we decided by 4pm. We immediately spoke with a United agent who showed us that the ticket code 04578171334786 (Please see attachment #2) demonstrated that although United carried the flight, to san Francisco, ultimately LAN was responsible for taking care of us and any subsequent issues we encountered because LAN had bought that leg of the trip from United (We purchased the entire reservation through Vayama (Please see attachment #3). After checking in with United, we began to call the LAN number we were given ( Please see attached phone bill (#4) with proof of 7 outgoing calls to LAN at the San Francisco International Airport) but never once received a call back (See attached phone bill (#4) with proof of never having received an incoming call from LAN). We also attempted to call the travel agency Vayama (#4) and LAN customer service (#4) could find no help in reaching our final destination. We also called FIA Card Services (#4) where we were informed by Justin Hodge that even if we were to arrive in Lima that it would be difficult to get into Cuzco from Lima as flights to Cuzco were very full and at risk for selling out. In other words, the best offer we got from LAN (which they were never able to fulfill despite our many documented phone calls) would have likely only taken us to Lima where we would have potentially stranded without being able to reach our destination and would not have been able to take our proposed flight back to Denver as we would not have boarded the initial leg in Cuzco. We immediately decided that we did not want to take this risk; as we did not have luck with either Vayama or LAN we filed a complaint with FIA Card Services.
After our dispute was denied, I began to research our legal rights and happened upon the United States Department of Transportation’s website, which says the following about overbooking:
“DOT requires each airline to give all passengers who are bumped involuntarily a written statement describing their rights and explaining how the carrier decides who gets on an oversold flight and who doesn't. Those travelers who don't get to fly are frequently entitled to denied boarding compensation in the form of a check or cash. The amount depends on the price of their ticket and the length of the delay."
“If the airline arranges substitute transportation that is scheduled to arrive at your destination between one and two hours after your original arrival time (between one and four hours on international flights), the airline must pay you an amount equal to your one-way fare to your final destination that day, with a $400 maximum.”
“If the substitute transportation is scheduled to get you to your destination more than two hours later (four hours internationally), or if the airline does not make any substitute travel arrangements for you, the compensation doubles (200% of your one-way fare, $800 maximum).”
“You always get to keep your original ticket and use it on another flight. If you choose to make your own arrangements, you can request an "involuntary refund" for the ticket for the flight you were bumped from. The denied boarding compensation is essentially a payment for your inconvenience.”
(http://airconsumer.dot.gov/publications/flyrights.htm#overbooking)
Based on this information, Andrew and I easily concluded that we were denied our legal rights by LAN Airlines in several ways and are entitled to compensation. First, we were not offered a written statement after being bumped involuntarily. Next, we were not provided with boarding compensation in the form of check or cash. Third, we were not provided with substitute transportation to our final destination within 4 hours of our originally proposed arrival time. Therefore, we have concluded that we are entitled, by law, to a complete refund of our airline tickets. We do not want a voucher from LAN; instead we want a refund of our full ticket price in order to be able to rebook a flight to the same destination with another airline.*
*The summary above does not account for the fact that LAN denied having our baggage even though it was in their possession (as showed to us by a United employee, Fraz Zahid) and that we were stranded 3 days without luggage (See attached receipts for clothing #5), that we were scolded at the LAN counter for “being late” even though it was clearly not our fault as we had come in on a LAN flight, or that we were hung up on several times by LAN. Therefore, we refuse to give LAN further business.
Because we recognize that it would be most helpful for all parties to resolve this outside the FIA dispute process, I attempted to contact both Vayama and LAN. At Vayama, I was told by Andy at 4:14pm on February 1st that I was entitled to a refund for my flights. Andy told me he would write up my situation and would ensure his management got back to me within 2 business days. Today (February 2nd), at 9:32am I received a call from Andy’s manager who also agreed that it was within my legal rights to expect a refund. She insisted, however, that because LAN had received the money for the flight, LAN had to be the one to offer me the refund. When I insisted that I booked through Vayama and that surely she could help me, she refused and told me I should call LAN.
When I called LAN (XXX-XXX-XXXX) I spoke to Karen at 12:45 pm who put me on hold for over 18 minutes until she came back on the line to tell me that she had spoken to her manager and that I had to call “customer service” at XXX-XXX-XXXXx4. I insisted that surely Karen or her manager could assist me, but she claimed she could not and assured me that when I called the other number there would certainly be a manager available who would help me. I spoke with Andrea at 1:30pm who informed me that because it was 5:38 in Chile there was no one available to talk to me (apparently customer service is open 8am-4pm Chilean time). She then told me that even if there were someone available, I had no choice but to file a claim online; from there, Andrea informed me, the investigation would take 15-20 business days. I requested an expedited process, but she stated that this was not feasible. I am dubious that this will be handled appropriately by LAN because of the service I have received this far and because of comments such as these that appear when I Google LAN customer service:
“My advice would be to walk outside and bang your head against the sidewalk; you're as likely to get satifaction from this as from any other method. 
”
“The only way is to complain by e-mail. All of management are hidden behind layers of protection. It is absolutely, 100% impossible to get in touch personally with anyone. Even going to their main office won´t do any good. No one will talk to you. They´ll tell you to send a mail with your complaint.”
“No need to contact anyone - bad service is included in your ticket price
”
(http://www.flyertalk.com/forum/other-north-south-america-frequent-flyer-programs/1170616-whom-contact-bad-service-lan.html)
In conclusion, we paid for a service we did not receive. Additionally, it is within our legal rights to receive a full refund for the service not rendered in the amount of $4,251.40 (We will not request additional compensation of up to $800 per person, although DOTS does allow this per the information above; we simply want our money back for services denied us and do not intend to seek additional damages). We have done everything we could possibly be expected to do in order to receive this refund and have been denied at every turn. We are requesting your support in resolving this matter as dedicated customers since 2005. Thank you in advance for any assistance you can provide.
Best,
Erin Mack Trapanese and Andrew Trapanese)