New York AG slaps online travel company with $2.6 million fine, citing ‘predatory’ behavior
IIt’s a common experience shared by millions of travelers. Go online in search of a cheap flight and the booking site reports that seats are almost sold out: “Only two tickets left!” The message is clear: hurry and book, or lose.
Consumers should be skeptical of these kinds of pressure tactics, says New York Attorney General Letitia James, who just launched a swipe at online travel companies that engage in deceptive marketing practices.
Yesterday James announced the results of a survey on Fareportal, which operates several well-known travel agencies, including CheapoAir and OneTravel. Based in New York, Farereportal employs more than 2,500 people in the United States, United Kingdom, Mexico, Canada and India.
“Fareportal used deeply deceptive tactics to trick millions of consumers into booking airline tickets and hotel rooms,” Attorney General James said. “Because of this dishonest and predatory behavior, Fareportal will pay the state $2.6 million, correct its dishonest advertising, and share accurate information with customers in real time.”
“The New York Attorney General’s Office released findings that largely related to new features tested by a Fareportal product development team,” according to a statement provided to Forbes by email. “Fareportal has voluntarily agreed to a settlement to remain fully focused on helping customers book travel with confidence. Fareportal cooperated fully with the Attorney General’s staff, and there were no findings of consumer harm or admission of wrongdoing.
The fine is a slap in the face for the private company, which made $5.34 billion in revenue in 2019, Weekly trip annual “power list” ranking of the best travel agencies. Last year, Weekly trip reported that Fareportal’s sales in 2020 were down about 58% due to the pandemic.
In a scathing statement, James reviewed a litany of examples of systematic deception tactics the company used to deceive consumers between 2017 and 2019.
During this period, the investigation concluded that Fareportal had created a false urgency around availability. “These types of harmful tactics, known as ‘dark patterns,’ are used to manipulate and induce consumers to purchase goods or services,” the statement said. For example, a consumer searching for one ticket would see the message “only 2 tickets remaining”, while a consumer searching for two tickets would see “only 3 tickets remaining”, according to James, noting that Fareportal also seized similar fake messages in the research hotel.
James’ investigation also revealed that Fareportal companies used “fictitious prices in alleged airfare discounts” and fake countdowns. There were misleading disclosures about service charges and cancellation policies, and about how many consumers had purchased travel insurance or upgraded their seats.
A button that indicated how many consumers were currently viewing flight and hotel listings was actually a computer-generated random number between 28 and 45. “So even if a consumer was the only person considering purchasing tickets to a particular flight at a particular time, Farreportal would falsely represent that at least 28, and up to 45, other people were considering purchasing tickets for the same flight at that particular time,” according to the case document.
In addition to the $2.6 million fine, Fareportal was ordered to ensure that all messages are based on accurate real-time data and that the comparison prices displayed were actually offered.
“Fareportal creates value for travelers by combining sophisticated technology with access to a personal travel agent,” according to Fareportal’s statement. “Fareportal’s technology is constantly evolving as technical teams develop and test new features to help travelers find great deals and helpful travel options. In this case, most of the experimental features tested have not been deployed on Fareportal’s full platforms. All practices were voluntarily discontinued, most more than two years ago.