FTC warns hotels that don't disclose 'mandatory' charges
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Ever check into a hotel and find out the room was going to cost more than the reservation price you thought you were paying?
The Federal Trade Commission thinks numerous hotels have been deceiving customers by failing to quote all charges when reserving a room, so the agency is stepping in to force full disclosure.
Specifically, the agency is concerned about an extra fee commonly known as a "resort fee" -- a charge for such things as Internet access, long-distance phone calls or the use of the hotel's pool and exercise room -- which is assessed regardless of whether the guest uses the services.
Such fees can be as high as $30 per night, the agency said.
Last month, the agency sent warning letters to 22 undisclosed hotel operators telling them to stop trying to hide resort fees when quoting room rates online.
"Consumers are entitled to know in advance the total cost of their hotel stays," FTC Chairman Jon Leibowitz said in announcing the action.
The letters were triggered by complaints from consumers during an FTC conference earlier this year on "drip pricing," a technique in which companies advertise only part of a product's price and reveal other charges later as the customer goes through the buying process.
Many people complained that they did not learn about added resort fees until arriving at the hotel.
In a review of online reservation sites, the FTC said it found that some hotels quoted a lower "total price" or "estimated price" that included the room price and taxes, but left out the mandatory resort fees. On some sites, the resort fee was listed nearby -- but separate from -- the quoted prices.
Other sites used an asterisk next to the total price that consumers could follow to see a disclosure, usually in fine print and sometimes on another page, that quoted mandatory resort fees.
A few sites simply stated that "other fees may apply."
"We believe that online hotel reservation sites should include in the quoted total price any unavoidable and mandatory fees, such as resort fees," the FTC said in its warning letters.
The letters urged hotel operators to review their websites to ensure they do not misrepresent the total price consumers can expect to pay. The letters also noted that the companies could face enforcement actions for violating federal regulations against deceptive practices.
Listing resort fees near the quoted price or in the fine print, or referring to other fees that "may apply" is not sufficient notice, the FTC said.
Travelers should contact hotels directly to ask about mandatory charges, the agency said. People who avoid certain hotels because of resort fees should let management know the reason another hotel got their business, the agency said.
The FTC wants consumers who believe they've been deceived about resort fees or any other mandatory fees to file a complaint online at www.ftccomplaintassistant.gov.
First Published December 13, 2012 12:00 am