Attorney General James secures $2.6M from online travel agency for deceptive marketing
New York Attorney General Letitia James secured $2.6 million from an online travel agency, Fareportal…
New York Attorney General Letitia James secured $2.6 million from an online travel agency, Fareportal Inc., for misleading consumers with deceptive marketing tactics. The investigation revealed that the company, which operates several travel-related websites and mobile platforms, including CheapOair.com and OneTravel.com, created false urgency around availability to sell airline tickets and hotel rooms. Fareportal often falsely advertised that airline tickets or hotel rooms were quickly selling out to pressure customers into making purchases on its platforms. These types of nefarious tactics, known as “dark patterns,” are used to manipulate and trick consumers into buying goods or services. As a result of Attorney General James’ agreement with the online travel company, Fareportal is required to pay $2.6 million to the state and display accurate, real-time information to consumers.
“Consumers wanted to land affordable tickets through Fareportal’s platforms, but were met with lies instead,” said Attorney General James. “Fareportal used deeply deceptive tactics to trick millions of consumers into booking airline tickets and hotel rooms. As a result of this dishonest and predatory behavior, Fareportal will pay $2.6 million to the state, correct its dishonest advertising, and share accurate information with customers in real time. We won’t tolerate attempts to trick consumers and will continue to protect every penny that belongs to New Yorkers.”
Attorney General James’ investigation into Fareportal, which is headquartered in New York, revealed that since at least 2017, the company used a number of deceptive tactics to create a false sense of urgency and social pressure to induce customers to book airline tickets or hotel rooms, whether or not Fareportal had the best price for the tickets or hotel rooms. Fareportal used manipulative tactics, known as dark patterns, that are designed to trick online consumers into making purchases or decisions that appear to be in their interest but actually aren’t.
For example, Fareportal falsely displayed to consumers searching for flights that only a handful of tickets remained for the most popular flight options. These false messages were keyed to the consumer’s search. A consumer searching for one ticket would see a message stating “Only 2 tickets left” on the most popular flights, while a consumer searching for two tickets would see a message stating “Only 3 tickets left.”
Fareportal used similar tactics on consumers looking to book hotel accommodations, falsely representing the percentage of hotel rooms in a particular area that had already been reserved. These false messages were similarly keyed to the consumer’s search. A consumer searching for hotel rooms 16 to 30 days before check-in was told that 41 percent to 70 percent of hotel rooms had already been reserved, while a consumer searching for hotel rooms 7 to 15 days before check-in was told that 71 percent to 80 percent of rooms had already been reserved.
Fareportal also fabricated information related to the popularity of certain products, including the numbers of consumers that had purchased travel insurance, the number of consumers that had upgraded their seats, and the number of consumers currently viewing certain flight and hotel listings, using computer-generated random numbers instead of accurate, real-time data.
The investigation also revealed the deceptive use of countdown timers, misleading disclosures related to the service fees that were added to the price of airline tickets, and misleading statements related to the policy for cancellations made within 24-hours of booking. Fareportal also used fictitious prices in purported markdowns for airline tickets. All of the conduct was designed to increase the percentage of visitors to Fareportal’s platforms that would complete a purchase.
This agreement requires Fareportal to pay $2.6 million in disgorgement and costs. In addition, Fareportal is required to ensure that all messages related to the supply or popularity of travel-related products and services are based on accurate data or information. In addition, Fareportal is required to ensure that any comparison prices used in promoting discounted prices for airline tickets are prices at which the listed tickets were actually offered to consumers. The agreement also requires Fareportal to make accurate disclosures related to its service fees and its cancellation policy.
This matter was handled by Assistant Attorneys General Marc Montgomery and Hanna Baek and Senior Enforcement Counsel Jordan Adler of the Bureau of Internet and Technology, under the supervision of Bureau Chief Kim A. Berger and Deputy Bureau Chief Clark P. Russell. The Bureau of Internet and Technology is a part of the Division for Economic Justice, which is overseen by Chief Deputy Attorney General Chris D’Angelo and First Deputy Attorney General Jennifer Levy.
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