Whistleblowers expose dark underside of online travel agencies

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By | December 26th, 2016

When things go wrong with an online travel agency — and they often do — we assume it’s the result of incompetence.

But what if it’s something else?

That’s the intriguing question raised by the stack of online documents recently deposited in my inbox by a group of former employees for a major online travel agency. Based on the conversations I’ve had with them, I believe these whistleblowers are legit. And soon, I plan to name them and their employer.

For now, enough is known to issue a stern warning, and that’s exactly what I’m going to do. Based on their statements, here’s what you need to know now:

Beware of fees.
Their agency is a fee factory, according my insiders. The company charges a service fee when a customer calls their contact center — often hundreds of dollars. It’s all disclosed in the fine print of the terms and conditions. Nothing illegal about that, of course, except that people who call to book sometimes don’t know about the fees until the end of the booking process, by which time they are unlikely to cancel.

Watch for fare inflation.
When a customer calls the travel agency’s contact center for a flight booking, the agent can see there are tickets available for a set fare. But the agent quotes a higher price. If a customer on that call happens to find prices cheaper than quoted online, the agents go into the reservation system, block those fare classes, and ask the customer to “check again.” At this point the customer sees the higher price point, and the agent demands the customer book immediately or face another price hike.

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24-hour rule? What 24-hour rule?
The agency routinely ignores the Transportation Department’s 24-hour rule, say insiders. This, despite the fact that it claims to adhere to the rule on its own website. If you call to cancel, agents follow a laddered decision tree — basically, they try to find out if the customer is aware of the 24-hour rule. If not, the agents are instructed not to offer a refund. Only if the customer threatens to complain to authorities or the BBB is the fare fully refunded.


“Archaic” customer service
When a customer has a post-sales problem, the agency makes the resolution process “deliberately archaic” forcing the traveler to make multiple calls, with multiple agents, over multiple days in their pursuit for a resolution. Often, the only resolution is to approach a consumer advocate like, ahem, me. In order to cover up the agency’s misdeeds, it hires a reputation management firm to populate the complaint sites with positive comments.

Deceptive ticketing practices
Once a booking is made online there’s a separate group within the customer service department that quality controls and assesses the margins for that booking. If the team finds a similar ticket that offers a better profit margin to the company, the agent, unbeknownst to the customer, will cancel that ticket and rebook the customer on this new higher-margin ticket. Then the customer is told there’s been a “schedule change.” Similarly, when a first class, one-way business ticket is booked, and this group determines that a round-trip ticket offers a better margin, the one-way is canceled and rebooked as a round-trip. The customer is never informed that they now have a round-trip ticket. This hurts both consumers, who have to deal with unexpected schedule changes, and airlines, who lose revenue.

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I know your next question: Who is doing this?

Patience, my friends. I’ll name names soon enough.

For now, I’ll leave the commenters to speculate. But that’s really the wrong question. Maybe it should be: Who is not doing this?

I think every online agency is tempted to engage in these unethical practices, to the detriment of the consumer and the industry it serves. Something to think about the next time you use an online agency.



  • Harvey-6-3.5

    This seems ripe for referral to a State attorney General for prosecution.

  • Alan Gore

    Online travel agencies could very easily offer better customer service than primary travel provider sites, using the ‘trouble ticket’ system that works so well on other online sites, with any representataive is able to pick up an open problem report and take up where the last contact left off. So why don’t they?

    They seem to have found that there is more profit in focusing on the easiest trips, making the CSR contacts hard to find, outsourcing everything, and making each contact start over with your problem from the beginning.

  • Bill___A

    Yes, the question would be who is doing this? I only use an OTA as a last resort, but this is not my experience.

  • disqus_00YDCZxqDV

    from reading Elliott for the past several years it seems like all the online agencies are doing this !

  • BubbaJoe123

    “I think every agency is tempted to engage in these unethical practices, to the detriment of the consumer and the industry it serves. Something to think about the next time you use an agency.”

    Fixed that for you.

  • Rusty Shackleford

    I disagree. There are many reputable agencies and travel agents. I’ve noticed you’ve made many of these “fixed that for you” comments lately. Maybe trying to not be so cynical. Not everyone is out to get you. There are no black helicopters.

  • AJPeabody

    Saying it is one of many OTA’s without giving a clue or a name tars them all with one brush. I assume your reticence is due to incomplete legal steps by the whistleblowers in their quest for justice and money, so until the t’s are dotted and the i’s are crossed, mum’s the word. Do the big reveal as soon as possible, please.

  • BubbaJoe123

    I’ve seen no evidence that sketchy travel practices are less likely to be found in bricks and mortar travel agents than in OTAs, so the constant drumbeat against OTAs seems a bit overdone.

  • MF

    Just b/c the insiders are from one agency doesn’t mean they all don’t do similar things. Witness the scratch n dent scams at car rental agencies. What’s being reported here is not just greed, it is fraud and a betrayal of trust.

  • Helene Apper

    Rusty – I think this is directed to the big online agencies – not the mom and pop travel agencies and their agents. I am a travel agent. I am not with an online agency. I have had many a client who said well I can book that cheaper on XYZ online agency. I always say go ahead – I hope you have no problems. As an agent, we charge service fees for booking air. Airlines pay none to little commission. As an agent, we have to watch our client’s flights like a hawk so if there is a change, we advise them asap and fix any problems. The large online agencies don’t do this. However these large online agencies charge a large percentage and don’t tell them about it until it is too late. Nope – he is referring to the big box agencies – not the small agents who are decent and honorable and while we live off commission, we also live off of referral business which you only get if you are upfront and honest with your client.

  • Annie M

    Wow – everything I have suspected all along is true. I will be waiting anxiously to find out all the details and I hope these employees who came to you will not be outed or harmed by the story for telling the truth. I hope your legal department looks at all of this to make sure you can’t be sued too.

  • J M

    No, the question should be “Who is doing this?” … asinine to say otherwise. If you know that more than one agency is doing it, then let us know. Otherwise you are assuming .. and I think you’re not saying who it is in hopes that alot of them get bad raps. That’s just plain bad journalism OR advocacy.

    That being said, why people book through an OTA and not direct makes no sense. 10 years ago, may have made sense … now you can always get the same price direct. I use OTA to price match different businesses and then go direct to them to book.

    Although in the past I have never had an issue with an OTA, I also have never run into major issues that need sorting out. But now, makes no sense to use them. IMO anyhow.

  • PsyGuy

    You can ALWAYS be sued, whether you can prevail at verdict is a completely different issue, assuming you can afford to fight it to the end.

  • PsyGuy

    I’m putting my bet on the Orbitz/Expedia/Travelocity conglomerate. 1) You can actually book first class seats with them. 2) They have the clout and market share that the airlines have to work with them. 3) They have the tech to monitor all those outstanding purchases in real time for more profitable margins.

  • Rusty Shackleford

    Helene,

    I would agree with you, however look at what BubbaJoe posted.

    In the original article, and Elliott said, “I think every online agency is tempted … ”

    BubbaJoe posted ” I think every agency…,” removing the word “online.”

    All I was getting at is for people not to be so dang pessimistic. There are so many problems in this world and they are things worth complaining about. Online travel agencies may be one of them. But to stereotype all travel agents is, in my humble opinion, improper.

  • Alan Gore

    Isn’t Orbitz actually an airline-sponsored pool operation for selling off excess seats?

  • jim6555

    It was exactly that at one time. Since then, it has become just another OTA and has been sold and then sold again to Expedia. Expedia, in addition to it’s own brand and Orbitz ownes Travelocity, rentalcars.com, hotels.com, Venere and several more travel sites.

  • Lindabator

    Right, it was – and Bubba thinks all us brick and mortar pull this crap, too, which is ridiculous. The REASON OTAs get away with it, is because they are so big — my clients are generally repeat and referral, and if I pulled this kind of stuff, would have neither. So his comment is very insulting to those of us who are in the business because we sincerely care, NOT as the OTAs are – just to make a bick

  • Carol Molloy

    After years of booking my own travel, without any difficulties, I used a brick and mortar TA this past summer for a European vacation. She found a much better hotel arrangement than I could find on my own, and a better airfare for my multi city trip. It was well worth the modest fee for the ample savings and peace of mind.

  • S363

    Being a longtime reader of Mr. Elliott, I never (never, never) use online travel agencies. I’ve heard too many horror stories.

  • Lindabator

    LOVE hearing that! My clients always love the special things like after hours private tours to the Sistine Chapel, or private transfers in Venice, that I can not only offer, but at a modest fare. And you are keeping the business local, which is even better! :)

  • cscasi

    Have you seen any evidence that sketchy travel practices are more likely or as likely to be found in brick and mortar travel agents than in OTA’s?

  • BubbaJoe123

    Nope. Little evidence either way. The only data I’ve seen is that elliott.org story on ASTA revoking the memberships of several agencies, and they were all brick and mortar agents.

  • Fred

    So in your world every business is “bad”, “suspect” and “sketchy” until someone can prove to you otherwise. If I meet you in person, shall I ask you to prove to me you don’t have some awful disease before we shake hands? Because I currently have no evidence you don’t!

    How about if we try this for you: In California, every travel agency in the state pays into a State Travel Consumer Restitution Fund. Check to see if the non-OTA agency you are doing business with has ever had a claim for restitution filed against them by a client or been ordered by the State Attorney General (the legal regulator of travel agency registrations in California) to pay restitution directly.

    I am so sorry you live in a world where every business is suspected of being “sketchy”.

  • The Original Joe S

    There’s always someone who will kvetch.

  • The Original Joe S

    Go see the Don, and ask to be his friend.

  • The Original Joe S

    Hey, cheapskates! Use an OTA and suffer the consequences!

  • jsn55

    Sadly, I believe most of this to be true. I question a couple of ‘practices’. reported here. If the OTA cancels and rebooks at a higher cost, who pays the airline change fee? If someone books a o/w first class tix, how does the OTA profit from changing that to a r/t tix?

  • DepartureLevel

    Wow, I knew they were all bad but this is unbelievable…..on top of which if you even get to a “reliable” agent with questions or concerns, they are usually located in India or the Philippines……and I’m sorry but the Philippines’ agents may speak a bit better English (vernacular) but still are crippled when it comes to thinking out of the box or suggesting a solution to a problem. All they ever do is talk about the problem and repeat dumb questions or make statements totally unrelated to the problem. So frustrating the few times I have ever dealt with them (advocating for a relative). I’m feel like I have to dumb myself down to some ignorant, uneducated level. I would rather die than deal with them. Call DIRECTLY to airlines/ car rental agencies, etc. DO NOT USE EXPEDIA, PRICELINE, ORBITZ and the like — , can’t be emphasized enough !

  • BubbaJoe123

    Not every business is sketchy by any means. That said, I have no reason to believe, absent evidence to the contrary, that a randomly chosen brick-and-mortar agency is any more or less “bad,” “suspect,” or “sketchy” than a randomly chosen OTA. I object only to the broad-brush attacks on “OTAs,” as if they are somehow more worthy of suspicion or concern than brick-and-mortar agencies.

  • PsyGuy

    Wouldn’t surprise me. Wouldn’t surprise me if Orbitz was just a drug laundering business front.

  • PsyGuy

    I hate when they repeat asanine statements like “Yes I understand I am here to give you excellent customer service”, and they say that 8 times, and so far they haven’t done anything.

  • PsyGuy

    The airline change fee is probably factored into the cost and it’s also probably discounted or its recorded as an error, or some other no fee reason code.

    It’s still common to find some round trip itineraries that are less expensive than one way.

  • PsyGuy

    They have the clout to get what they want from airlines.

  • PsyGuy

    Let’s not forget Wells Fargo.

  • PsyGuy

    Let’s be truthful though, not EVERY TA is a pristine as you. real TA’s have there bad apples too.

  • PsyGuy

    ASTA membership doesn’t mean anything. Dishonest TA’s will continue to be dishonest just without the membership.

  • Gary K

    All I can say is “WOW”, and I consider myself pretty knowledgeable and experienced. There’s an active thread in the UA forum involving an OTA and an unfathomable (at least to me) set of flight changes. This comment of Chris’ offers a theory as to origin of the seeming irrational.

    >> If the team finds a similar ticket that offers a better profit margin to the company, the agent, unbeknownst to the customer, will cancel that ticket and rebook the customer on this new higher-margin ticket. Then the customer is told there’s been a “schedule change.” <<

    If true, this is so unethical it goes beyond anything the cynical part of me ever suspected, but what I would like to know is, how does the OTA get around the airlines' change fees?

  • Rusty Shackleford

    Of course B&M TAs have their bad apples. I’m was just pointing out that Bubba consistently makes comments like replacing the word “some” with “all” or deleting the word “online” as in this case only to follow that statement with “fixed that for you.”

    Im just sick of the constant cynicism in this world is all. It’s okay to see that glass as half full.

  • Michael__K

    AFAIK the OTA can generally hold the reservation in GDS for 24 hours before ticketing; otherwise they can still cancel and rebook within 24 hours with no change fee.

    If someone books o/w first class, and the r/t ticket costs less, the OTA can book the r/t and pocket the difference.