The Federal Trade Commission (FTC) announced on November 28 that it sent warning letters to 22 hotel operators notifying them that their online reservation sites may violate the law by providing a deceptively low estimate of the total cost of a one-night stay in a hotel room. The FTC did not disclose the names of the hotel operators that received the letters.
According to the FTC’s press release, the warning letters are the result of consumer complaints that were raised during the FTC’s May 2012 conference on so-called “drip pricing.” Drip pricing occurs when companies advertise only a portion of a product’s total price and reveal additional charges as the customer goes through the buying process.
The warning letters mention mandatory “resort fees” and other required charges for amenities such as newspapers and the use of fitness facilities as common consumer complaints. The letters also state that consumers often did not know they would be required to pay the fees in addition to the quoted hotel rate. In the letters, the FTC encouraged the companies to review their websites and ensure that their ads accurately represent the total price consumers can expect to pay.
Click here to read the FTC’s press release and view a sample warning letter.
Click here to to view the FTC’s drip pricing conference website.