Inside the Beltway Madness: The Crackdown on Alleged Hotel Scam Websites

By Robert McGarvey

There are important matters involving travel that our Senators and Representatives could be poking into – everything from sometimes deceptive resort fees through the absurdities of frequent flyer mileage programs — but, no, apparently they would rather do the bidding of the American Hotel and Lodging Association and sponsor legislation aimed at stopping the menace of online hotel booking scams.

That is, rogue sites pretending to be an actual hotel.

Say what? You are unfamiliar with this being much of an issue?

Likewise here.

Ditto other reporters.

And yet several senators have sponsored a bill to stop this purported menace and that is a companion to a House bill.  

Everybody insists this is not aimed at Expedia, Booking.com, et. al.  

The House bill says: “This bill amends the Restore Online Shoppers’ Confidence Act (ROSCA) to prohibit a third party online hotel reservation seller (an online seller that is not affiliated with the person who owns the hotel or provides the hotel services or accommodations) from charging a consumer’s credit card, debit card, bank account, or other financial account for any good or service sold in an Internet transaction, unless the seller discloses all material terms of the transaction.

“Before the conclusion of the transaction, the seller must describe, and disclose the cost of, the offered good or service.

“The seller must also disclose, in a manner that is continuously visible to the consumer throughout the transaction process, the fact that it is not affiliated with the person who: (1) owns the hotel, or (2) provides the hotel services or accommodations.”

AHLA is adamant that “there is a mushrooming problem of ‘affiliates’ or rogue vendors using false advertising and other scams to trick consumers into thinking they are booking directly with the hotel.”

AHLA has in the past said bogus hotel bookings scam consumers for upwards of $200 million annually and that is indeed a bad thing. There are said to be instances of consumer credit card info stolen, and of sites that charge consumers for hotel bookings and don’t in fact have rooms to sell. All bad. All should be stopped.

But is this the stuff of legislation?

Why?

Pretty much everything cybercriminals may be doing on bogus hotel websites already is illegal under various federal and state laws.   New legislation is unnecessary.

Pretty much from the beginning of the web savvy companies have continually searched the web for bogus iterations of their sites – and they have gotten good at initiating takedown actions.

All those defensive actions are happening without the need for new federal law.

Why do hotels insist they need a special law that targets alleged counterfeit websites?

AHLA has said: “The legislation makes it easier for consumers to tell the difference between the actual hotel website and fraudulent ones masquerading as name brand sites. It requires third-party hotel booking websites to clearly disclose that they are not affiliated with the hotel for which the traveler is ultimately making the reservation.“

Wait, however. Assume I am a criminal who has erected a counterfeit hotel website with the intent of stealing credit card info and applying bogus charges.  Am I going to be bound by a law that insists I notify consumers I am not such and such legit hotel operator?

Uh, of course not.

Are you beginning to suspect that just maybe this bill is some kind of a Trojan horse in the hotel industry’s so far unsuccessful campaign against Online Travel Agencies and their commissions ranging up to 30%?

Hoteliers scream in continuous pain as they contemplate those OTA fees. Sometimes you honestly want to reach for ear plugs, the din can bet so loud.

Which is why you have to think that just maybe this legislation is a backhanded slap at the OTAs.

Even though the Senate legislation very specifically says: “Platforms offered by online travel agencies provide consumers with a valuable tool for comparative shopping for hotels and should not be mistaken for the unlawful third-party actors that commit such misappropriation.”

When was the last time you were booking at Expedia and in fact thought you were booking direct with Hyatt?

Right, that has never occurred, not to you, possibly not to anybody.  

I never thought I’d express support for more Congressional gridlock but in this case I am. We just don’t need this law.

Now, if Congress wanted to attack resort fees – legislation in fact championed by Senator Claire McCaskill — count me as a supporter.

But as for this superfluous scam website bill, nah, not so much.