AHLA Applauds Bipartisan, Bicameral Bill To Protect Consumers From Online Hotel booking Scams

Senate and House crack down on third-party reservation websites that trick consumers into thinking they are booking with a hotel

WASHINGTON, D.C.  (May 17, 2017) – The American Hotel & Lodging Association (AH&LA) today applauded a group of bipartisan Senate and House leaders on the introduction of legislation aimed at stopping online hotel booking scams that affect millions of hotel bookings each year. In research from 2015, just 6 percent of American travelers reported having booked on a website they believed was the hotel’s website and later found out they booked on a fraudulent site not affiliated with the hotel. Today, 22 percent reported the same bad experiences.

The Stop Online Booking Scams Act was introduced today by U.S. Senators Steve Daines (R-MT), Bill Nelson (D-FL), Deb Fischer (R-NE), Amy Klobuchar (D-MN), and U.S. Representatives Ileana Ros-Lehtinen (R-FL), Lois Frankel (D-FL) and Peter Welch (D-VT).

The bill will provide vital safeguards and take necessary corrective action to stop scammers from mimicking legitimate hotel websites and exploiting unassuming consumers. Third-party booking sites will need to make clear that they not the actual hotel’s website before any consumer’s credit card is charged, making it crystal clear to consumer who they are doing business with online.

“In today’s digital age, consumers rely on the comfort and ease of online hotel bookings and they should always have the utmost confidence in the online booking process. Unfortunately, with online travel bookings surging over the past several years, averaging 500 hotel bookings per minute, so has the rate of scams. Too many consumers have been duped by these bait and switch websites, and this legislation sends a clear message that this kind of deceptive behavior will not be tolerated,” said Katherine Lugar, president and CEO of AHLA. “As the digital marketplace continues to grow and evolve, the lodging industry puts guests first and works to ensure there is ample transparency, consumer choice and confidence as they book hotel reservations.”

Lugar added, “We applaud the leadership of Senators Daines, Nelson, Fischer and Klobuchar, as well as Representatives Ros-Lehtinen, Frankel, and Welch for taking appropriate steps to protect consumers from these scams and look forward to working with them and their colleagues to move this important legislation through the legislative process in both chambers of Congress.”

The Federal Trade Commission, the Better Business Bureau, AAA, and various other consumer advocacy groups have already issued strong warnings about these scams.

The Stop Online Booking Scams Act:

Recognizes the Consumer Benefits of Legitimate Booking Sites:

  • Includes a sense of Congress that recognizes the robust online marketplace that allows consumers to easily compare brands and make reservations
  • Notes that actions by third party sellers that misappropriate brand identity or use deceptive sales tactics are harmful to consumers

Narrowly Targets Illegitimate Third-Party Reservation Sellers:

  • Makes it unlawful for a third party online hotel reservation seller who is not affiliated with the hotel to accept payment for a reservation unless the seller discloses that they are not affiliated with the hotel
  • A third-party seller may achieve this by:
  1.  Including conspicuous language throughout the transaction
  2.  Including prominent display of the seller’s brand identity

Gives Enforcement Authority to the Federal Trade Commission and State Attorney Generals:

  • Makes a failure to comply with the third-party disclosure requirements an unfair or deceptive act under the Federal Trade Commission Act
  • Gives state AGs the authority to bring a civil action against companies who violate this provision