New York AG Slaps Online Travel Company With $2.6 Million Fine, Citing ‘Predatory’ Behavior

It’s a common experience shared by millions of travelers. Go online looking for a cheap flight and the booking website signals that seats are almost sold out: “Only two tickets left!” The message is clear: Hurry up and book, or lose out.

Consumers should be skeptical of those kinds of pressure tactics, says New York Attorney General Letitia James, who just delivered a shot across the bow of online travel agencies that engage in deceptive marketing practices.

Yesterday James announced the results of an investigation into Fareportal, which operates several well-known travel agencies, including CheapoAir and OneTravel. Headquartered in New York, Fareportal employs more 2,500 people in the United States, the U.K., Mexico, Canada and India.

“Fareportal used deeply deceptive tactics to trick millions of consumers into booking airline tickets and hotel rooms,” said Attorney General James. “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.”

“The New York Attorney General’s office has issued findings which were largely about new features being tested by a Fareportal product development team,” according to a statement provided to Forbes via email. “Fareportal voluntarily agreed to a settlement to remain fully focused on helping customers book travel with confidence. Fareportal cooperated fully with the Attorney General’s staff, and there was no finding of consumer harm nor admission of wrongdoing.”

The fine is a slap on the wrist for the privately held company, which brought in $5.34 billion in sales in 2019, making Travel Weekly’s annual “power list” ranking of top travel agencies. Last year, Travel Weekly reported that Fareportal’s 2020 sales were down roughly 58% due to the pandemic.

In a scathing statement, James ran through a litany of examples of systematic deception tactics used by the company to trick consumers during the period between 2017 and 2019.

During that period, the investigation concluded that Fareportal created false urgency around availability. “These types of nefarious tactics, known as ‘dark patterns,’ are used to manipulate and trick consumers into buying goods or services,” according to the statement. For example, a consumer searching for one ticket would see the message “only 2 tickets left,” while a consumer searching for two tickets would see “only 3 tickets left,” according to James, noting that Fareportal also keyed similarly false messages into hotel searches.

James’ investigation also found that Fareportal’s companies used “fictitious prices in purported markdowns for airline tickets” and fake countdown timers. There were misleading disclosures about service fees and cancellation policies, and about how many consumers had purchased travel insurance or upgraded their seats.

A button that showed how many consumers were currently viewing flight and hotel listings was actually a computer-generated random number between 28 and 45. “Thus, even if a consumer were the only person considering purchasing tickets for a particular flight at a given time, Fareportal would falsely represent that at least 28, and as many as 45, other people were considering purchasing tickets for the same flight at that particular time,” according to the case document.

In addition to the $2.6 million fine, Fareportal was ordered to to ensure that all messages are based on accurate, real-time data, and that displayed comparison prices were actually offered.

“Fareportal creates traveler value by combining sophisticated technology with access to a personal travel agent,” according to Fareportal’s statement. “Fareportal’s technology is constantly evolving as tech teams develop and test new features to help travelers find great deals and helpful trip options. In this case, most of the experimental features being tested were not deployed across Fareportal’s full platforms. All of the practices have been discontinued voluntarily, most more than two years ago.”