Nearly 82,000 Minnesotans who booked trips on Travelocity.com in the last two-and-a-half years will get refunds for travel insurance.
Two companies that partnered with Travelocity automatically sold travel insurance policies to people buying airline tickets, State Commerce Commissioner Mike Rothman said.
Customers who didn't want the policies, priced $25 to $45, were told to opt out, Rothman said, a "clear violation of state law and represent a breach of consumer trust."
"Under Minnesota law, in order to sell someone insurance, you cannot automatically enroll them," Rothman said. "What it requires is you get the consumer's affirmative consent, either orally or in writing."
The settlement averages about $30 per Minnesota traveler.
Besides $2.5 million in refunds, the companies will also pay a $250,000 civil penalty.
Those who wish to seek a refund should contact the State Commerce Department.
A spokeswoman for Travelguard, which sold the policies along with National Union Fire Insurance, said the company is happy to have settled the matter.
EDITOR'S NOTE: An earlier version of this story incorrectly stated which organization will pay the refunds. The current version is correct.