Last week, New York Attorney General Letitia James announcement This online travel agency Fareportal Inc., which operates several travel-related websites and mobile platforms, including CheapOair.com and OneTravel.com, will pay $2.6 million in New York for misleading consumers with deceptive marketing tactics.
“Consumers wanted to secure affordable tickets through Farereportal platforms, but were instead met with lies,” James said in a statement. “Fareportal used deeply deceptive tactics to trick millions of consumers into booking airline tickets and hotel rooms.”
The Fareportal investigation found that, since at least 2017, the company has created a false urgency around the availability of airline tickets and hotel rooms to pressure consumers into making purchases on its platforms. The AG challenged these marketing tactics as “dark patterns”, referring to deceptive design features and methods used to manipulate consumers into buying goods and services. As we have previously coveredso-called “dark patterns” have become a priority in rulemaking and enforcement.
According to James, the deceptive tactics employed by Farereport included:
- Urgency and scarcity messages (for example, incorrectly stating that there are only a handful of plane tickets left or the percentage of hotel rooms in a particular area that have already been booked)
- Other misleading “social boost” messages, including the number of consumers who had taken out travel insurance or were currently viewing certain flight and hotel listings
- Misleading price comparison, falsely indicating that advertised tickets were previously offered for sale at a higher price, which had been reduced at the time of the offer
- Misleading Disclosures Related to Service and Cancellation Fees
In many cases, the investigation revealed that the statistics displayed by Farreportal were computer-generated random numbers tailored to a consumer’s research, instead of accurate real-time data. For example, a consumer looking for hotel rooms 16-30 days before check-in was told that 41-70% of the rooms had already been booked, whereas if the check-in date was between 7 and 15 days, the message would indicate that between 71% and 80% of the rooms were reserved.
The purported numbers of people “watching” the flights were also computer-generated random numbers. The AG’s claims in this regard did not focus on the specifics of what was being sold, but on the “false sense of urgency” created by these messages, “designed to entice consumers into making a purchase… and thus increase Fareportal’s income”.
Speak Cancellation insuranceFareportal is required to display accurate, real-time information to consumers, ensure that any comparison pricing is truthful, adequately disclose its service fees and cancellation policy, and pay $2.6 million dollars to the state in reimbursement and costs.
“We will not tolerate attempts to deceive consumers and will continue to protect every penny that belongs to New Yorkers,” James said.
The FTC has also made clear its intention to target dark motives. What remains somewhat unclear is exactly how to distinguish between deceptive tactics and effective digital marketing tools, and how to determine which methods regulators will target in the future. But given the concept’s recent emergence in lawsuits and private litigation, companies need to stay tuned while evaluating their digital marketing practices, to reduce the risk of similar claims.