Expedia Faces Traveler Fee Lawsuit Alleging Tax Fraud and Racketeering
Skift Take
Online travel agencies have been vehemently opposed to detailing the components of the taxes and fees they collect on prepaid hotel bookings because it would expose the wholesale rates they obtain from hotels and the markups that the booking sites impose. This lawsuit could potentially impose changes in Expedia's financial relationship with its affiliates.
There have been several consumer lawsuits over the years charging deceptive practices in the ways online travel agencies opaquely bundle "taxes and fees" when selling hotel stays that consumers pay for at the time of booking.
Expedia, for example, settled a consumer class-action lawsuit in its home state, Washington, for $123.4 million in 2009. The lawsuit alleged breach of contract and deceptive business practices in the way Expedia described its fees when selling hotel rooms on a wholesale basis, which is also known as the merchant model.
This week the same Seattle law firm Hagens Berman, which was part of the litigation that was settled in 2009, filed a new consumer lawsuit seeking class action status that accuses Expedia of conducting a tax fraud, or a racketeering enterprise (RICO), in allegedly scheming with an affiliate, Reservations.com, to collect a secret fee to ratchet up profits and rip off consumers.
The plaintiff, Joseph Church, on behalf of the purported class of consumers, seeks to have the lawsuit certified as a clas
