Washington, D.C. – The U.S. Senate Subcommittee on Consumer Protection, Product Safety, Insurance and Data Security this week took a significant step toward confronting the impact of online hotel booking scams on American consumers. At a hearing staged to examine the cost of such scams to U.S. consumers and the economy in general, Acting Federal Trade Commission (FTC) Chair Maureen Ohlhausen answered questions about what actions were planned to address such scams from a regulatory standpoint.
The hearing was called to address the growing problem of deceptive online companies that imitate hotel or airline websites to attract bookings, according to Senator Amy Klobuchar (D-MN). Klobuchar is working with Sen. Deb Fischer (R-NE), Sen. Steve Daines (R-MT) and Sen. Bill Nelson (D-FL) to develop bipartisan legislation that would propose rules for third-party hotel booking websites. Dubbed the “Stop Online Booking Scams Act” (S.3402), the legislation would require third-party hotel booking sites to clearly disclose they are not affiliated with the hotel the traveler wants to book. A companion bill in the House of Representatives (H.R.4526) was introduced by Rep. Lois Frankel (D-FL) and Ileana Ros-Lehtinen (R-FL) and has the support of 24 other House members.
According to the American Hotel & Lodging Association (AHLA), about 15 million online booking scams occur every year, resulting in $1.3 billion in bad bookings. The rogue websites use a variety of means to present themselves as official hotel representatives when in fact they are not.
AHLA Vice President of Government Affairs Maryam Cope said in a press release about the issue that educating consumer and public officials about this problem is crucial—but 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,” she said.
It is hoped that, if implemented, the legislation would help consumers distinguish between true hotel websites and fraudulent ones masquerading as legitimate sites. In addition to the FTC, the Better Business Bureau and AAA Auto Club have issued warnings to members about rogue booking sites.
The FTC also warns business and leisure travelers about potential scams and provides booking tips on its blog that minimize the risk of inadvertently using rogue websites. Those include:
- Call the hotel phone number on your own rewards card or from a hotel-sponsored advertisement to book.
- Check for small-print surcharges that can indicate a site is not hotel-owned
- If you get an emailed confirmation of your booking, take it with you on your trip
- Call the hotel directly to book—or to confirm that they have the reservation you made online.
Reach Maryam Cope at (202) 289-3125 or gov.affairs@ahla.com
