The American Hotel & Lodging Association (AH&LA), the sole national association representing all segments of the nearly two million-employee lodging industry, today applauded a group of bipartisan Congressional leaders on the introduction of a bill aimed at stopping online hotel booking scams that have affected some 15 million hotel bookings a year at a cost of $1.3 billion each year.
The hotel industry has been tremendously successful in connecting consumers with online bookings. With online travel bookings surging over the past several years, averaging 480 hotel bookings per minute, so has the rate of scams. Research shows that an increasing number of consumers are misled into making hotel reservations through fraudulent websites and call centers that give the appearance of being a hotel’s website, but actually have no relation to the hotel.
As consumers increasingly move to mobile booking, smaller screens make it harder for consumers to differentiate between the scam site and the legitimate hotel’s website. Additionally, indications that could have otherwise been key to consumers knowing the difference, like URLs, are hidden at times.
These scams result in wholly lost reservations, undisclosed credit card charges on customers’ accounts, incorrect accommodations, the wrong services guests often need, such as disability access, the wrong set of amenities such as two double beds or rooms next to each other for families, or lost rewards points.
The Stop Online Booking Scams Act introduced today by Representatives Lois Frankel (FL-22) and Ileana Ros-Lehtinen (FL-27), along with a bipartisan group of cosponsors, will strengthen the Restore Online Shoppers’ Confidence Act to provide vital safeguards and takes necessary corrective action to stop scammers from mimicking legitimate websites and taking consumers for a ride.
Original co-sponsors include: Reps. Lois Frankel (D-FL), Ileana Ros-Lehtinen (R-FL), Bill Shuster (R-PA), Mimi Walters (R-CA), Ted Deutch (D-FL), and Patrick Murphy (D-FL), and Congressman Joe Heck, D.O. (R-NV).
“Our research clearly shows that consumers are worried about scams when booking online with third parties—and rightly so, because many of them have personally experienced very serious, horrible situations. This legislation is sorely needed to protect against any more consumers falling victim to this kind of unscrupulous activity,” said Katherine Lugar, President and CEO of AH&LA.
“The hotel industry is encouraged by today’s Congressional efforts to help protect consumers through this bipartisan legislation. We applaud their foresight and initiative to putting an end to fraudulent websites posing as the hotel’s online portal.”
The Federal Trade Commission, the Better Business Bureau and various other consumer advocacy groups have already issued strong warnings about these scams. The Stop Online Booking Scams Act takes further, much needed action, to prevent scammers from continuing to exploit unassuming consumers. By requiring third party booking sites to have continuous, prominent notification that their websites are not associated with a specific hotel’s website before any consumer’s credit card is charged, this legislation will make it crystal clear to consumer who they are doing business with online.
“This legislation is an important line in the sand for consumers and travelers. Consumers deserve transparency in the hotel booking process. They should not have to be a detective to determine whether or not they are booking directly with the hotel,” said Lugar. “It is always safest and best to book direct – so consumers should have that option.”
Additionally, the legislation will help rebuild consumer confidence among third-party vendors by empowering attorneys general in all states to pursue restitution against rogue booking sites that do not comply with the law, so that affected parties may seek financial compensation for being scammed. Action would also be required of the FTC to study the scam and issue a report on what they are doing to address the issue.
“It’s time to ensure consumers booking online are protected and can feel safe and comfortable throughout the booking process. These solutions will offer consumers peace of mind so they can enjoy their hotel stay hassle-free,” Lugar added. “We thank Representatives Frankel and Ros-Lehtinen, along with five original cosponsors, for their leadership on this critical issue and look forward to working with them and their colleagues toward advancing this important legislation.”
To view an infographic on the scope of online booking scams and how the Stop Online Booking Scams Act will protect consumers, please click here.
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