Mark Pestronk
Q: A mid-July article in Travel Weekly's sister publication, PhocusWire, covered the settlement between Hopper, a major online booking site, and the Federal Trade Commission. Hopper has agreed to pay $35 million to settle charges of deceptive practices in advertising and selling airfares, hotels and car rentals. What did Hopper allegedly do, and what lessons does it have for retail travel agency ads and sales? Did Hopper's alleged practices violate the DOT fare advertising rules? If so, why didn't the DOT file the case instead of the FTC?
A: The FTC's complaint centers on the Hopper app, but the lessons also apply to websites and even to telephone and email price quotes and sales. According to the FTC, the app's "Swipe to Book" screen allegedly listed the total airfare. However, the price display on phones failed to disclose that Hopper would add charges for a "tip" and "VIP support fees" that only appeared if you scrolled down to where the fees appeared.
If you happened to scroll down and see the fees and didn't want to add a tip or pay for VIP support, you could toggle the preselected fees to the off position. If you didn't scroll down before swiping, the final purchase amount would include those fees, thus making it higher than the total price shown on the first screen.
Hopper argued that, because you could toggle the fees to the off position if you found them, the fees were optional and therefore not deceptive. The FTC argued that the practice, taken as a whole, was deceptive advertising, and if the facts are true, it certainly was.
The FTC's investigation found that during the years that the practice was in effect, Hopper received many consumer and internal staff complaints, and it ceased the practice by mid-2023.
Hopper is listed in Travel Weekly's Power List as the 12th-largest travel agency. The alleged practice, coupled with the odd-sounding word "tip" in the context of an online travel transaction, shows that the company has been a kind of outlier despite its size. No other seller of travel that I know of has engaged in the practices the FTC found deceptive, and certainly no other seller calls its service fee or transaction fee a "tip."
For retail agencies and home-based independents, the case shows that not only the DOT but also the FTC can come after you if your travel solicitations are deceptive. The key difference is that the FTC can enforce the law against deceptive standalone hotel-only and car-only solicitations, while the DOT cannot. The FTC's broader powers are probably the reason why the FTC took this case and the DOT stayed out of it.
Another lesson is that you should never quote a total price if it doesn't include fees that are hard to opt out of. Instead, make any optional fees a truly optional add-in by requiring the client to select or agree to them, both online and offline, in written solicitations and in oral quotes.