Online booking scams are a major issue in the hotel industry, with some estimates saying they compromise as many as 15 million hotel bookings a year, translating to $1.3 billion in bad bookings annually. In February, the House of Representatives put forth a bill attacking online booking scams in the form of the "Stop Online Booking Scams Act," which would require full disclosure from third-party hotel reservation websites for their continued operation and could levy fines of up to $11,000 for violations. Now, a new initiative put forth from the U.S. Senate is expanding overwatch of these sites.
The "Stop Online Booking Scams Act" is the Senate equivalent to H.R. 4526. The motion was introduced by Senators Steve Daines (R-MT) and Bill Nelson (D-FL), who are reaching across the aisle to keep third-party booking sites in line. As part of the provision, third-party booking sites will be required to maintain continuous notification that their websites are not associated with any hotel's website before a consumer credit card is charged, making it clear that the consumer is not booking directly through the hotel.
The American Hotel & Lodging Association's president and CEO, Katherine Lugar, released a statement in support of the Senate's action.
Consumers must be protected when booking hotels online! Read @AHLA's statement on the recently intro'ed senate bill https://t.co/THZ5CDe7ZE
— AHLA (@AHLA) September 27, 2016
"Consumers should always have the utmost confidence in the online booking process from start to finish and they should feel safe and protected when booking travel online. This legislation sends a clear message that this kind of deceptive behavior will not be tolerated," Lugar said. "As the digital marketplace continues to grow and evolve, consumers deserve transparency, and every minute we wait to pass this commonsense legislation, more people fall victim to these deceptive practices."
The Federal Trade Commission, the Better Business Bureau and a number of other consumer advocacy groups have been after illegal booking sites for some time, and Klobuchar and Fischer reached out to the FTC to investigate these deceptive practices. The Senate's new protections are also structured to protect the meetings and events industry from online scams that would book events without actually setting them up, stranding planners and attendees on site with nowhere to go.
"The problem is only getting worse. We see new dimensions to the scams—like these ‘meeting pirates’—everyday unfortunately," Lugar said. "As long as scammers continue to get a pass, they are going to find new and more sophisticated ways of taking advantage of more travelers."