I was charged a $14 booking fee! Is this a scam?

By | April 26th, 2017

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.

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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.

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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.

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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.

  • finance_tony

    I can’t get too excited about this. First, I doubt the “only” thing that came up when Googling “Cedar Lodge” was the site on reservations.com. It’s quite impossible, in fact. The argument about having the hotel in the URL is also a non-starter. For example, if you look at an elliott.com post about American Airlines, “American Airlines” will be in the URL – it’s basic “search engine friendly” URL formatting. I think there was another post recently about this site (or maybe booking.com) and the point about the obvious banner was made there as well.

  • Alan Gore

    Some small properties let an OTA handle all of their reservations. Be aware when you are booking a room at Small Hotel through Expedia rather than smallhotel.com.

  • Altosk

    Recently, I’ve been hit with “Room Block Pirates.” This is a thing for folks who attend conventions. These scam artists send you emails that use the conference host’s headers and images to tell you that you MUST BOOK YOUR HOTEL IMMEDIATELY or be locked out of the conference rate. There’s a cute little button in the email that will take you right to this third party site that is not affiliated with the conference. There is of course an upcharge, and/or it’s out right piracy where they steal your personal information.

    You can Google this new practice of scamming. I sent Chris a note about it awhile back. Might make for a good article of warning.

  • sirwired

    Maybe there’s more need for the law requiring additional disclosure than Chris thought when he wrote an editorial on this a few months back, where he expressed amazement that this is a common issue.

  • Jeff W.

    The URL thing, while can be a clue, becomes more complicated when companies outsource the website work. Alan and Tony mention this in earlier posts.

    But it is not limited to travel companies nor small businesses. If you ever surf to ESPN, ABC, and the Disney properties, they may have go.com as part of the URL. While Go is part of the Disney family of companies, it an internal thing and most people do not know that espn.go.com is the same as espn.com. In this case, both URL schemes are valid.

  • Chris_In_NC

    If its not a scam, it is definitely an unethical practice by booking services.
    Sometimes the official site is not intuitive or easy to find.
    For example Old Faithful Inn, Yellowstone Hotel, etc is managed by Xanterra and has the URL http://www.yellowstonenationalparklodges.com/lodging/ . Everything else is a reservation service that charges a fee.

    Sometimes it helps to put “official site” after your search terms, but most importantly, read the site carefully.

  • Chris_In_NC

    Hmm, I can’t get reservations.com to come up when I search for “Cedar Lodge Hotel.” In fact, the first listing after the “ads” is http://www.stayyosemitecedarlodge.com/

  • Bill___A

    It is not a good practice, I’ve seen it many times. Never been caught by it though. If you’re going to play “travel agent” then you need to know the pitfalls which include things like this. That $14 is a relatively cheap learning experience.

  • William Leeper

    Online Travel Agent

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