09.27.16

Daines, Nelson: Patrons Should Be Protected from Online Booking Scams

Daines and Nelson introduce legislation to protect consumers from online booking scams  

U.S. SENATE —U.S. Senators Steve Daines (R-MT) and Bill Nelson (D-FL) today introduced legislation to protect consumers from online booking scams.  

Daines and Nelson introduced The Stop Online Booking Scams Act that protects consumers from illegitimate third party websites that trick consumers into thinking they are making reservations directly with hotels.

Online booking sites have created a marketplace where consumers can shop for hotels across thousands of brands on a single platform. With the rise of online booking (480 bookings per minute) has come an increase in online booking scams. Fraudulent websites give the appearance of being connected to a hotel, but actually have no relationship with them. Transactions on these sites can result in additional hidden fees, loss of expected loyalty points, or even confirmation of reservations that were never made. The Stop Online Booking Scams Act addresses this problem.

“Tourism is an important part of Montana’s economy and we need to make sure that folks are getting what was promised to them,” Daines stated. “Legitimate online booking sites provide consumers with a valuable tool for comparison shopping, but deceptive websites trick consumers and scam them into paying for reservations that don’t exist.”

“This bill intends to crackdown on crooks and fraudsters who trick consumers into booking hotel rooms that don’t exist,” said Nelson.  “Millions of consumers use the Internet to easily compare prices and find great deals on hotel rooms.  We can’t have a few bad actors ruin this for everyone else.” 

Steve Wahrlich, Chair of the Montana Lodging & Hospitality Association: “The lodging industry is a major player in Montana’s economy – responsible for, providing $135 million in tax revenue and supporting nearly a billion dollars in total sales throughout the state.  Unscrupulous actors that seek to take advantage of unsuspecting travelers jeopardize that. We are grateful to Senator Daines for recognizing this growing threat and introducing the Stop Online Booking Scams Act with his colleague Senator Nelson. We look forward to working with them to protect Montana travelers by moving this commonsense legislation through the legislative process.”

Daniel Schuman, Policy Director, Demand Progress: “We commend Sen. Daines and Sen. Nelson for their legislation that, if enacted, will help protect travelers from scam hotel reservations. Consumers deserve transparency, and the Stop Online Booking Scams Act of 2016 will reduce fraudulent transactions and provide more tools for states and the FTC to take action against illegitimate sites.” 

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

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