Coalition Urges DOT To Act Soon On The Strongest Possible Rule To Crack Down On Hidden Airline Fees
RADNOR, PA - Business Travel Coalition (BTC) today applauded the Federal Trade Commission's (FTC) warning letters to 22 hotel operators concerning drip pricing, or hidden fees that surprise consumers upon arrival at hotels. Typical carve-outs include “resort,” “housekeeping,” and “Internet access” fees; however, there are others. FTC’s authority in this area comes from Section 5 of the Federal Trade Commission Act. This is virtually the same wording as in the Airline Deregulation Act at 49 U.S.C. § 41712 that vests authority for airline consumer protections solely at the U.S. Department of Transportation (DOT) with regard to hidden airline fees and other unfair and deceptive practices.
Drip pricing is a deception scheme whereby a supplier carves out a portion of its true price; labels that portion as a mandatory extra fee or charge; deducts it from the true price; and features the artificially reduced remainder of the true price in advertising, online postings and price information supplied to global distributions systems and travel agencies. Long-time consumer advocate Ed Perkins, the Consumer Travel Alliance and Business Travel Coalition in August of this year called on FTC Chairman Jon Leibowitz to aggressively address the widespread practice of “drip pricing” by some hotels, motels and resorts. (Download FTC letter here.)
In the case of the airline industry, since 2008, most major U.S. airlines have been charging for so-called ancillary services, such as for accessing premium seating, and have been hiding associated fees by withholding fee information from travel agencies. As such, agents and travelers cannot efficiently compare “all-in” prices (base fares and fees) of air travel alternatives and must visit numerous airline websites to search for fees and pay separately for the services. These hidden fees represent an unfair and deceptive marketing practice that is costing all air-travel consumers dearly.
“BTC this week launched an official White House “WE the PEOPLE” petition-campaign requesting that true air travel comparison-shopping be restored for consumers through an early 2013 U.S. Department of Transportation (DOT) Notice of Proposed Rulemaking (NPRM). The coalition has until December 25 to secure 25,000 signatures,” said BTC Chairman Kevin Mitchell. “If successful, then the White House is committed to formally reviewing this request and providing a public response. DOT must require airlines, via a rulemaking, to provide fee information to sales channels where they offer base fares so consumers can see, compare and buy the complete air travel product,” added Mitchell.
The FTC press release can be found at http://ftc.gov/opa/2012/11/hotelresort.shtm