Last week, New York Attorney General Letitia James announced that 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 to New York for misleading consumers with deceptive marketing tactics.
“Consumers wanted to land affordable tickets through Fareportal’s platforms, but were met with lies instead,” James said in a statement. “Fareportal used deeply deceptive tactics to trick millions of consumers into booking airline tickets and hotel rooms.”
The investigation into Fareportal revealed that, since at least 2017, the company created 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 alleged misleading design features and methods used to manipulate consumers into buying goods and services. As we have covered previously, alleged “dark patterns” have become a priority in rulemaking and enforcement.
According to James, the deceptive tactics employed by Fareportal included:
- Urgency and scarcity messages (e.g., falsely representing that only a handful of airline tickets remained or the percentage of hotel rooms in a particular area that had already been reserved)
- Other misleading “social nudge” messages, including the numbers of consumers who had purchased travel insurance or were currently viewing certain flight and hotel listings
- Misleading comparison pricing, falsely representing that advertised tickets were previously offered for sale at a higher price, which had been slashed at the time of the offer
- Misleading disclosures related to service and cancellation fees
In many cases, the investigation found that Fareportal’s displayed statistics were random, computer-generated numbers tailored to a consumer’s search, instead of accurate, real-time data. For instance, a consumer searching for hotel rooms 16 to 30 days before check-in was told that 41-70% of rooms had already been reserved, whereas if the check-in date was between 7 and 15 days away, the message would indicate that between 71% and 80% of rooms were booked.
Purported numbers of people “looking at” flights were also computer-generated random numbers. The AG’s allegations in this regard focused not on the details of what was being sold, but on the “false sense of urgency” created by these messages, “designed to prompt consumers to complete a purchase … and thereby increase Fareportal’s revenues.”
Per the Assurance of Discontinuance, Fareportal is required to display accurate, real-time information to consumers, ensure that any comparison pricing is truthful, make adequate disclosures related to its service fees and cancellation policy, and pay $2.6 million to the state in disgorgement and costs.
“We won’t tolerate attempts to trick 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 patterns. 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 recent emergence of this concept in enforcement actions and private litigation, businesses should stay tuned while evaluating their digital marketing practices, to reduce the risk of similar allegations.