Scam hotel sites pathway to identity theft

via Moak: Scam hotel sites pathway to identity theft, clarionledger.com, 2/17/2016

PDF: Hotel booking fraud

A few months ago, I wrote about an alarming scam that has been sweeping the nation. As travelers make their hotel reservations online, scammers have set up fake websites that look like the hotel’s official sites but are, in fact, just a pathway to having your identity or money stolen.

According to the American Hotel & Lodging Association, close to 15 million reservations were made on deceptive hotel booking sites in the last year alone, resulting in guests finding themselves out hundreds of dollars for a worthless reservation or one that delivered much less than promised. AHLA estimates these scams cost U.S. travelers upwards of $1.3 billion per year.

These fake websites have ripped off many an unwary consumer, and the scam has attracted the attention of members of Congress. Last week, a bipartisan group of representatives introduced a bill to protect consumers from these practices. The Stop Online Booking Scams Act (H.R. 4526) was introduced Feb. 10, and was referred to the House Committee on Energy and Commerce (according to congress.gov).

“Booking a hotel room for a dream vacation should not lead to a nightmare,” noted Florida Rep. Lois Frankel, D-Florida. “This bill will reduce fraud and give law enforcement more tools to protect travelers.” Frankel co-introduced the bill with colleague Ileana Ros-Lehtinen, R-Florida, Bill Shuster, R-Pennsylvannia, and 11 other colleagues (including six Democrats and five Republicans).

Of course, many consumers use third-party websites such as Travelocity and Priceline to book their hotel reservations rather than going to the hotel’s website directly. But increasingly, a Google search for a particular hotel might turn up a few sites that look like the real thing but are cleverly disguised fakes that collect your payment information for when you make your “reservation.” Of course, when you get to the hotel, they’ve never heard of you, and your account has been raided.

If it becomes law, the bill would strengthen three key fraud-fighting tools to help consumers:

  • Require disclosure of non-official status. All third-party hotel booking websites would be obligated to disclose they are not affiliated with the hotel for which the traveler is ultimately making the reservation. This new requirement will help consumers know when they are actually on a hotel’s website and when they are instead on a third-party booking site, which will help identify fraudulent sites masquerading as name brand sites. Violators would face fines of up to $11,000 per infraction, be responsible for financially compensating fraud victims, and have their illegal website shut down. (Of course, fraudulent sites would be unlikely to follow this provision in the law.)
  • Empower states. Under the proposed legislation, state attorneys general would have the ability to go after scammers in federal court and seek damages for victims. In most states, under current law, only federal authorities can fully penalize criminals who commit online hotel booking fraud.
  • Simplify the procedure to report fraud. The Federal Trade Commission would be encouraged to simplify its online complaint system to make it easier to report hotel scams and would be required to report on the impact of hotel booking fraud.

“I’m proud to work with my colleagues, Lois and Bill, on stopping fraudulent hotel booking websites,” said Rep. Ros-Lehtinen. “So many Americans conscientiously save for their vacations and are deeply disappointed when they discover they have been victims of a crime. Congress should do all it can to crack down on these perpetrators of fraud who take advantage of both families and the businesses the websites impersonate.”

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