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FTC Hits Hotel Room Reseller for Deceptive Practices

(December 26, 2017) A hotel reseller booking site has agreed to stop practices that led customers to believe they were booking rooms on the actual hotel site when in fact the customers were not. When booking with the reseller, customers had their credit cards charged in advance, could not avail themselves of the hotel’s cancellation policies, did not earn loyalty rewards, and were not necessarily seeing all of the available rooms and prices.

Reservation Center, LLC, Partner Fusion, Inc. and TravelPASS Group, LLC agreed as part of a Federal Trade Commission (“FTC”) consent decree to let consumers know that were not booking rooms directly with the hotels but rather with a reseller who purchased an inventory of rooms from Expedia, Priceline, and Orbitz, which did not include all rooms and rates available.

The reseller advertised on Google, Bing, and Yahoo. When customers clicked the advertisement’s link, they were directed to the reseller’s site that prominently displayed the particular hotel’s logo. Nowhere on the page did it indicate that the site was not maintained by the hotel.

The FTC complaint notes that the website created “the impression that consumers are booking hotel rooms directly through the advertised hotel, and thus, that reservations made through Defendants are subject to the same terms and policies as those applicable to consumers who book hotel rooms directly with the hotel. However, consumers who are members of the advertised hotel’s loyalty or reward program are not eligible to receive reward points or other program benefits when they book hotel rooms through Defendants, and the available hotel policies, such as payment or cancellation policies, are not necessary the same as those for consumers who book their reservations directly through the hotel.”

If a consumer dialed the telephone number in the advertisement, the sales agents were trained to give “the net impression that the caller had reached the reservation center for the advertised hotel itself or an entity affiliated with and acting directly for that hotel and not an independent, third-party hotel reservation agency.”

The FTC found the practices were deceptive and violated the FTC Act. The reseller agreed to a stipulated order to stop the practices.

Federal Trade Commission v. Reservation Counter, LLC, TravelPASS Group, LLC, and Partner Fusion, D.C. Utah, No. 17 cv 1304-RJS, filed December 21, 2017.