In December 2017, the FTC settled claims with Reservation Counter, LLC, a hotel room reseller, after the FTC’s investigation into the travel company’s marketing practices. The FTC complaint alleged that Reservation Counter’s advertisements and process were “unfair or deceptive because consumers were misled in believing that they were booking hotels directly through the advertised hotel. Instead, the consumers were booking directly with Reservation Counter, and therefore were not able to receive hotel reward points, loyalty program benefits, and the same cancellation or payment policies as individuals booking directly with the hotel.
Specifically, the FTC alleged that prominent use of the hotel’s name, photograph, and logo, along with a reservations telephone number, which was managed and controlled by Reservation Counter, could mislead consumers as to the entity they were booking with. The settlement requires that Reservation Center clearly and conspicuously convey all material information about the purchase, disclose that their websites and telephone numbers are operated by the third-party agency, and prohibits the company from misrepresenting its affiliation with the hotels as well as using hotel names or logos in the search engine advertisement.
TIP: Even when acting as an authorized reseller of third party goods or services, advertisers should ensure that they are clearly and accurately communicating the reseller relationship and affiliation to consumers.