Online Travel Agency Enters Into $300K Settlement With DOT Over False Advertising Charges – Media, Telecoms, IT, Entertainment

United States: Online Travel Agency Enters Into $300K Settlement With DOT…


United States:

Online Travel Agency Enters Into $300K Settlement With DOT Over False Advertising Charges


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Online travel agency FlightHub Group entered into a
$300,000 settlement with the U.S. Department of
Transportation, resolving allegations that the company misled
consumers when marketing air travel.  

The DOT enforces its own consumer protection laws, which, like
the FTC Act, prohibit  “unfair or deceptive”
practices.  The DOT also enforces specific rules applicable to
the advertising of air travel, such as its full fair advertising rule, which requires
that, when advertising a price, the airline or travel agency must
give the “entire price to be paid by the customer.”
 

Here, the DOT alleged that banner advertising for
FlightHub’s “JustFly” brand promoted airfares that
were not actually available to be booked on the JustFly website at
the advertised price.  The DOT alleged that, when consumers
clicked on the banner ad, “the ‘cheapest fare’
available for the advertised trip could be 30% more expensive than
initially advertised in the banner.”  The DOT charged
that this practice violated DOT’s requirements, since, JustFly
“failed to ensure that a reasonable number of fares were
available at the time banner advertisements were made, advertising
a fare that was no longer available, therefore failing to display
the entire price to be paid for air transportation.”  The
DOT noted that JustFly has since added the language, “fares
found yesterday,” to its banners (which presumably signals
that the DOT is satisfied that this wording addresses its
concerns).  

The DOT also alleged that JustFly falsely advertised
“phone-only fares” as the cheapest fare in a potential
customer’s search results, along with statements such as,
“Only 2 tickets left at this price!”  The DOT said
that when customers called, however, “JustFly.com
representatives sometimes told callers that the fare advertised was
limited and offered air transportation at a higher price.”
 

In addition, the DOT alleged that JustFly advertised “free
cancellations” and “free 24 hour cancellation” above
itineraries before purchase.  The DOT charged, however, that
some customers were, in fact, charged for cancellation.  The
DOT indicated that these claims were not modified by a disclaimer
— which popped up when hovering the cursor over the claim — which
disclosed that cancellation fees actually do apply.  

What are some important takeaways here? 

First, for marketers of air travel, this enforcement action is
certainly a good reminder not only of the DOT’s full fare
advertising rule, but of the DOT’s expectation that marketers
should not promote fares unless a “reasonable number” of
them are available.

Second, for all marketers, this case highlights the importance
of ensuring the proper use of disclaimers  Disclaimers are
never going to help you if they directly contradict the claim being
made.  In other words, no regulator is ever going to agree
that you can advertise “free cancellation” and then
include a disclaimer that says it’s not actually free and
cancellation charges apply.  In addition, disclaimers should
be clear and conspicuous.  That means that they’ll be
easily seen, read, and understood by consumers.  When a
disclaimer is something you have to search for, or if it’s
something you only see if you take a specific action (such as by
clicking or scrolling), it’s much less likely that it will be
effective. 

And, finally, it’s interesting to note how the issues the
DOT were concerned about here are so closely aligned with the
concerns that other government agencies have been expressing
recently.  For example, just days ago the FTC highlighted its
concern about bait and switch advertising.  And,
the New York Attorney General’s Office just entered into
a settlement with another online travel
agency over its alleged deceptive sales tactics. While sometimes
regulators will take marketers by surprise, it’s very often the
case that they are pretty clear about their enforcement priorities.
 So, if you follow what they are doing (subscribing to
this blog can help!), it should should help you
address issues before they become the subject of the next big
enforcement action.


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