Online Hotel Booking Scams

Online Hotel Booking Scams Cost Americans $1.3 Billion Annually

Senate Subcommittee on Consumer Protection Pushes for More Action to Protect Consumers
website screenshot with the word scam
Online Hotel Booking Scams Cost Americans $1.3 Billion Annually

AHLA

The American Hotel & Lodging Association (AHLA) applauds the Senate Subcommittee on Consumer Protection, Product Safety, Insurance, and Data Security today for taking another step in raising awareness about the prevalence and significant impact of online hotel booking scams on American consumers.

At a hearing dedicated to examining the cost of scams on U.S. consumers and the economy, as well as the efficacy of law enforcement and prevention efforts being implemented to combat them, Senator Amy Klobuchar (D-MN) questioned Maureen Ohlhausen, Acting Chairman of the Federal Trade Commission, for an update on what was being done to address the specific issue of online hotel booking scams from a regulatory standpoint.

“One of the trends that we’ve seen threaten this huge industry, which, of course, has so many jobs in our country…is the rise of deceptive online companies that imitate the websites of hotels or airlines in order to attract booking,” Senator Klobuchar said.

In fact, some 15 million online hotel booking scams occur every year, translating to $1.3 billion in bad bookings. With most consumers searching at least seven to ten websites before booking a reservation, it’s become more common for rogue third-party online booking sites to find ways to piggy-back on legitimate hotels. These rogue sites trick consumers by mirroring the look and feel of the actual hotel website – using copyrighted images, trademarked logos and many times, even similar URLs – and essentially charge them for a service they never intend to provide.

This is why, Senator Klobuchar said, Congress developed bipartisan, bicameral legislation requiring third-party hotel booking websites to clearly disclose they are not affiliated with the hotel for which the traveler is ultimately making the reservation, as well as implored the FTC to investigate the issue.

“We applaud Senator Klobuchar’s continued efforts to shed light on this issue to protect consumers from online hotel booking scams as she works hand in glove with Senators Deb Fischer and Steve Daines to raise awareness of these scams and push for pursuit of bad actors scamming vulnerable travelers out of their hard-earned money,” said Maryam Cope, Vice President of Government Affairs for the American Hotel & Lodging Association. “It is critical to continue to educate consumers and public officials on the rise of impostor websites and call centers posing as a hotel website, but it’s not enough. Action from Congress and the FTC to help put an end to these deceptive practices is imperative to ensure consumer confidence in online and mobile bookings. The impact is too great to ignore. The FTC and other law enforcement agencies should crack down on these types of scams to stop bad actors and con artists and deter others who would seek to rip off consumers.”

To learn more about online booking scams, click here.

The Stop Online Booking Scams Act – which was introduced in the 114th Congress, sponsored by U.S. Senators Steve Daines (R-MT) and Bill Nelson (D-FL) and Representatives Lois Frankel (D-FL) and Ileana Ros-Lehtinen (R-FL) – will help consumers tell the difference between the actual hotel website and fraudulent ones masquerading as name brand sites. The legislation is expected to be re-introduced in the 115th Congress in Spring 2017.



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