During an internet search for the Cedar Lodge Hotel, Michael Hughes clicked on what he thought was the hotel’s official website and booked a room. The trouble came when he needed to cancel the refundable reservation. That’s when he discovered that he had actually booked through a third-party website — one that charges a nonrefundable booking fee.
Now Hughes wants to know: Is this a scam?
Hughes’ case highlights the need for consumers to be alert to the fact that the top several “hits” on an online search are often just ads. These ads are designed to appear to be the official website of the company for which you are searching. Frequently they are not, as Hughes found out.
Hughes told our advocates that the $14 that he lost in this transaction wasn’t a tragedy. But he is angry about the deceptive manner by which the site, Reservations.com, portrayed itself.
“When I googled ‘Cedar Lodge,'” he recalled,”the only thing that came up was cedarlodge.reservations.com. I later called the hotel to cancel this reservation. The clerk informed me that the reservation was made through a third-party website and that he could do nothing about it. It took me days to find out that the reservation had actually been made through Reservations.com.”
After he was able to cancel the reservation, he discovered the $14 charge on his credit card from Reservations.com. When he called the company to complain, he was told that he had agreed to the terms of their website which indicate that they charge a nonrefundable booking fee — even on refundable reservations.
Hughes did not recall ever reading these terms and told us, “Reservations.com seems set on disguising their website and keeping customers unaware of their added fees.”
Hughes disputed the charge on his credit card, but lost this battle when Reservations.com provided a copy of the terms of their site.
Feeling defeated he then contacted us to see if we could help shine a light on, what he believes is a fraudulent business practice. He posted his story on our forum and asked if anyone else had been “scammed” by this company.
When Hughes reached me, his main complaint was that, by placing the name of the hotel in the title, Reservations.com was presenting itself as the Cedar Lodge Hotel. Further, he asserted that their fees were hidden.
I was unable to completely agree.
The top hit during a google search for this hotel is Reservations.com, but it also says “Ad” in front of the site listing. And when I clicked on that site, there is a banner across the top of the page that says Reservations.com.
The top four hits in a search for this hotel are ads and are labeled as such. But they do contain the word Cedar Lodge in their heading. This could give the impression to an unsuspecting traveler that they are affiliated with the Cedar Lodge.
It isn’t until the fifth hit that the actual reservation site for this hotel appears.
Companies like Reservations.com are paying to have their websites appear at the top of that search page. Technically this is not a scam, but it is a nontransparent way of advertising. If a consumer searches for Cedar Lodge, it is perfectly reasonable to expect that the top hit on a search should be a place called Cedar Lodge and not an online travel agency.
But, unfortunately, that is not how search engines work.
In Hughes’ case, clicking on that first link led him to Reservations.com. By confirming his room on their site he agreed to their terms. Those are readily accessible on the website and disclose their fees:
You acknowledge that the rates displayed on our Site are a combination of the rates and fees charged by the service provider such as the hotel or hotel supplier and the service fee charged by us or on our behalf. In addition, we charge a non-refundable booking fee of $14.99 — for each transaction you book with us as consideration for us facilitating the transaction with the accommodation supplier and for providing you with free access to our 24/7 Customer Call Center. The booking or service fees charged by us will be clearly separated from the rate of the room.
Unfortunately, whether Hughes read these terms or not, he must abide by them.
So his $14 is lost. However, we receive many complaints such as Hughes’ in which consumers have lost a lot more. So in that respect, Hughes is lucky. And his case is an important one that can serve as a warning to others.
It is up to the consumer to be vigilant when booking airfare, hotel rooms or purchasing any product on the internet. Look carefully at the listing. Is the word “ad” included in the title? Also, take a close look at the URL address — and, of course, read those terms and conditions. All of this information will give you clues about what company you are actually patronizing.
Then you can make a fully informed decision before you hand over your credit card.
For Hughes’ part he would like us to know that while the assistance that we offered did not retrieve his money, he still appreciated it. He told me, “Good advice for the future. I won’t be fooled again.”
So in that regard, we consider this case a success.