What to do when booking a flight with an Online Travel Agency (OTA) and the flight is cancelled?

You have no recourse aside from suing them in a court of competent jurisdiction.

You will be very surprised to learn, however, what that is. Most likely it will not be one that is easily accessible to you.

And you have agreed to this when using their services -- because that's a contract. They might be in breach of the contract but if you are in Chicago are you going to sue someone in Cyprus or the United Arab Emirates for a few hundreds dollars? (These two are real world examples of where popular agents are domiciled.)

In very broad strokes, using agents really need to be avoided -- not only because of the above but because in case of IRROPs the airline can (and will!) deal more favorably with people who booked directly with them. Their assistance for those who booked with others very well might be telling you to talk to whomever you booked with. While others on the same plane are being rebooked at the desk to other flights, you are on the phone frustrated trying to reach an agent who might or might not be helpful and will lose time trying to reach the airline.

There are other issues with a third party agent. They might be using one carrier to issue all their booking (see my post ) and if that one goes under, then despite they are neither the marketing or the operating carrier you might not be able to fly.

To emphasize: even saving hundreds or thousands of dollars is just not worth the risk of not being able to fly.

Another possible issue is you might have two tickets when you thought you have one which might cause visa and quarantine issues.

In the United States:

One can use the Air Travel Service Complaint or Comment Form to submit a complaint to the US Department of Transportation (a.k.a. DOT):

Please use this form to file a complaint or comment about service you received or requested from an airline or ticket agent that does not relate to airline safety or security. This may include, but is not limited to, topics such as flight delays and cancellations, overbooking, disability, tarmac delays, baggage, discrimination, refunds, ticketing practices, family seating, frequent flyer programs, charter flights, privacy and air ambulance service.

See https://www.transportation.gov/airconsumer/file-consumer-complaint for more information.

FYI, from https://thepointsguy.com/news/canceled-flight-refund-how-long/:

The U.S. Department of Transportation mandates that a credit card refund be completed within seven business days of the request. Spoiler alert: I dug through multiple data points from TPG staff and TPG Lounge members, and most airlines are taking much longer. (Thankfully, though, not nearly as long as cruise lines).

I don't think there is a "one size fits all" answer. Every time you buy a ticket from an OTA you enter TWO contracts: one with the OTA and one with the airlines. These two contract can sometimes contradict each other. For example: if the flights get cancelled OTA T&C (terms & conditions) will state "needs to be handled by the airline" and the airlines T&C will say "needs to be handled by the third party booking agent".

To make matters worse: the terms and conditions of OTA vary wildly. There are some good ones out there but there also some really shady ones too. Many of them act as a "broker on your behalf" which creates a bit of a legal limbo. It's also unclear to what extent US DOT and EU regulations apply to OTAs since (s far as I know) these regulations only mention airlines directly and don't cover an OTA booking case specifically.

Here are a few thing that seem to work well:

1. Don't use an OTA unless there is a significant saving
2. Research the OTA carefully. Read customer reviews and read through their terms and conditions and assess whether these are reasonable. Some OTAs are really shady. For example: They will charge you for any call with the airline on your behalf. Avoid those
3. Pay with credit card. This gives the extra option of a charge back. Sometimes just threatening to charge back can move things along.
4. Take a note on your credit card bill on who took your money. Could be the airline, could be the OTA. Whoever has your money is the first one to contact.
5. Once you have a cancellation to deal with, start nagging. Call consistently, always insist that it's illegal for them to withhold your money, that you don't care what the internal process for this is, that you will initiate charge back and that you will file a complaint with the relevant authority if they don't pay you back by XXX. A good sentence is "You took my money, you will give it back".

I had two OTA tickets cancelled and got both refunded. Priceline actually proactively offered a refund, Expedia took a bit of nagging but eventually got around to it.