U.S. Senate holds hearing on online hotel booking scams

A hearing held earlier this week once again brought to light the issue of hotel booking scams, and reiterated the need for a legal precedent to be set to curtail them.

The Stop Online Booking Scams Act, introduced in the 114th Congress by U.S. senators Steve Daines (R-Mont.) and Bill Nelson (D-Fla.) and representatives Lois Frankel (D-Fla.) and Ileana Ros-Lehtinen (R-Fla.) in February 2016, is on track to be reintroduced this spring during the 115th Congress. This legislation would require third-party hotel booking websites to clearly disclose that they are not affiliated with the hotel for which a traveler is making a reservation, serving as a deterrent and legal precedent for which to dismantle and prosecute perpetrators of online booking scams.

According to the American Hotel & Lodging Association, roughly 15 million online hotel booking scams take place each year, resulting in $1.3 billion in fraudulent bookings. By imitating existing websites, web addresses and legitimate booking pages using copyrighted images and trademarked logos, these sites seek to fool the traveling public into making bookings that will not be fulfilled. This creates frustrations on behalf of the customer, which is then often levied against hotel operators.

The Senate Subcommittee on Consumer Protection, Product Safety, Insurance, and Data Security, which met on March 20, 2017, examined the cost of these scams on U.S. consumers, as well as the ability for law enforcement to prevent and combat them. 

“One of the trends that we’ve seen threaten this huge industry, which, of course, has so many jobs in our country… is the rise of deceptive online companies that imitate the websites of hotels or airlines in order to attract booking,” senator Amy Klobuchar (D-Minn.), said during the hearing.”

The AH&LA urged continued efforts to discourage these types of scams.

“We applaud Senator Klobuchar’s continued efforts to shed light on this issue to protect consumers from online hotel booking scams as she works hand in glove with senators Deb Fischer and Steve Daines to raise awareness of these scams and push for pursuit of bad actors scamming vulnerable travelers out of their hard-earned money,” Maryam Cope, VP of government affairs for the AH&LA, said in a statement.

“It is critical to continue to educate consumers and public officials on the rise of impostor websites and call centers posing as a hotel website, but it’s not enough,” Cope said. “Action from Congress and the [Federal Trade Commission] to help put an end to these deceptive practices is imperative to ensure consumer confidence in online and mobile bookings. The impact is too great to ignore. The FTC and other law enforcement agencies should crack down on these types of scams to stop bad actors and con artists and deter others who would seek to rip off consumers.”