OTA Operator Fined $2.6 Million for ‘Dishonest and Predatory’ Behaviorby Daniel McCarthy /
While travel advisors, and some consumers, have long been well-aware of how online travel agencies (OTA) game the system, this week New York State Attorney General also took notice, levying a fine on one of the more popular OTAs in business.
New York-based OTA-operator Fareportal, which runs CheapoAir and OneTravel, is being fined $2.6 million by New York because of deceptive marketing practices. The OTA boasts that it is ranked in the top 5 online travel companies in the U.S. by revenue and in the top 3 online travel companies in the U.S. by monthly traffic.
New York Attorney General Letitia James announced this week that the fine was being levied because the company “used deeply deceptive tactics to trick millions of consumers into booking airline and hotel rooms,” with “dishonest and predatory behavior.”
Most notably, James and New York targeted “dark patterns” that Fareportal, and other OTAs, typically use to “trick consumers into buying goods or services.”
That includes tactics like telling customers that they have the best prices for a limited time, or that the best rate is only available on two more tickets, which “created a false sense of urgency and social pressure to induce customers to book airline tickets or hotel rooms, whether or not Fareportal had the best price for the tickets or hotel rooms,” James’ office wrote this week.
The fine also targeted Fareportal’s use of “countdown timers, misleading disclosures related to the service fees that were added to the price of airline tickets, and misleading statements related to the policy for cancellations made within 24-hours of booking,” along with “fictitious prices in purported markdowns for airline tickets.”
“All of the conduct was designed to increase the percentage of visitors to Fareportal’s platforms that would complete a purchase,” James’ office wrote.
In a striking message, James ordered Fareportal to pay the fine and then “ensure that all messages related to the supply or popularity of travel-related products and services are based on accurate data or information.”
“In addition, Fareportal is required to ensure that any comparison prices used in promoting discounted prices for airline tickets are prices at which the listed tickets were actually offered to consumers. The agreement also requires Fareportal to make accurate disclosures related to its service fees and its cancellation policy.”
Fareportal did not respond to multiple requests for comment from TMR. However, in a separate statement to Forbes, the company said that the practices that New York Attorney General detailed were discounted voluntarily, “most more than two years ago.”