Charged too soon for my hotel stay

Question: I recently had an unpleasant experience with a Holiday Inn that became a Wyndham property in Boca Raton, Fla. I was hoping you could help me sort things out.

I booked a refundable room for my son at the hotel. I had the choice between prepaying a lower nonrefundable rate or a higher, refundable rate. I chose the refundable rate because I wanted to be flexible.

I assumed the hotel would charge my credit card at the end of my son’s stay. But somewhere between the time I made the reservation and the time my son checked in, the Holiday Inn converted to a Wyndham, and my credit card was charged the full $753. From my perspective, the hotel had changed the terms of its reservation by charging the cost of the full visit in advance without informing me.

I disputed the charge with American Express and they sided with the innkeeper because my son had approved the rate we originally agreed to. I don’t think I was treated right. What do you think? — Harvey Kaplan, Boca Raton, Fla.

Answer: I think if you prepaid for your hotel stay, you should have been offered a prepaid rate, which is less expensive than the price you paid for your fully refundable room.

And I’m sure the Wyndham would have done this the right way, if it weren’t for the reflagging.

Reflagging is lodging industry-speak for changing the hotel name. The property converted from a Holiday Inn to a Wyndham. When that happened, the hotel needed to close out Holiday Inn’s records, so it charged your card. If it hadn’t, it would have lost all of its credit card information during the conversion, according to Wyndham.

So why didn’t anyone explain this to you? Part of the problem may have been the way you approached the resolution. Although you contacted the hotel in writing, you didn’t keep corporate Wyndham in the loop. When the property denied your request for a rate adjustment, you could have appealed your case to Wyndham instead of jumping straight to a charge card dispute. A dispute is your second-to-last option, just before small claims court.

I might have given Wyndham one more chance to make this right, or at least to explain what went wrong. Instead, American Express sided with the merchant, leaving you with only one other choice (besides contacting me): taking this to a judge.

I contacted Wyndham on your behalf. The hotel offered you a refund of $52, the difference between the rate you paid and the prepaid, nonrefundable rate.

(Photo: jmv0586/Flickr Creative Commons)

  • SirWired

    “When that happened, the hotel needed to close out Holiday Inn’s records, so it charged your card. If it hadn’t, it would have lost all of its credit card information during the conversion, according to Wyndham.”

    This alone is grounds for a credit card dispute. just because Holiday Inn -> Wyndham is going to have some kind of records problem does not, in any way, give them the right to take nearly $800 out of the account before services are rendered.

    This is a case of a company making its problem the customer’s problem. And it’s a big no-no.

  • Adrian Shadowmoss

    When I saw the American Express involvement I understood one thing: AE does not – rather has never in four cases I’m familiar with – sided with the consumer. The talk around frequent travelers is that AE is afraid of losing clients and can afford to lose a customer rather than risk losing a much larger account, e.g., Holiday Inn International or Wyndham Properties. One of the four cases I’ve mentioned has had a bad, really bad, experience with AE in a very similar situation and involving reservations at a hotel property.

    Having said all that, however, you are right in advising Mr. Kaplan to contact all the parties of the first part FIRST before disputing a singular property snafu.
    AJS

  • Carver

    I agree with SirWired. That’s a bogus excuse. The hotel could have called the OP and made a new reservation under the Wyndham name. An unexpected charge is unacceptable. The only thing I don’t understand is what is meant by the son approved the charge

  • Ronda Cantin

    @ Carver, the guy probably made the reservation in his sons name, and so When the hotel went to double check the reservation, the son probably agreed to everything to be done with it. (I could be wrong, but that is what it seems like to me)

  • y_p_w

    Sounds to me that the “reflagging” created a situation halfway in between a prepaid, nonrefundable stay and a reserved but paid at the end of the stay rate. I’m curious what might have happened had Mr Kaplan asked to cancel. I suspect they would have allowed a full refund.

  • Jasper

    I disagree that Harvey should have brought Wyndham in the loop. He had no business with them. Holiday Inn breached the contract, and should have contacted the customer when it reflagged itself. Perhaps the customer did not want to stay in a Wyndham. The solution offered is unacceptable.

  • Abhi

    I think it should be the hotel’s responsibility to keep the promise irrespective of ownership or name change. Just because someone goes to a county office and changes name doesn’t make his/her credit card debts go away. Why should it be any different for a hotel. A commitment is a commitment and it should be adhered to in any case unless agreed and authorized by the ‘credit card’ holder paying for the reservation and NOT the actual person availing the facilities. I am very sure hotels have all the information they need to contact the credit card company which was used to purchase the reservation and/or the credit card holder in these extreme scenarios where a commitment was to be voided. I am glad to see that the difference in fares was paid back in the end (thanks to Chris) but this has to be a proactive deed on behalf of the hotel and not after so much of pursuation or denials.

  • Justin

    What this case breaks down to is pretty simple. Was there a meeting of the minds on this contract, and did someone with proper authority consent.

    Now here’s where it becomes quite clear that the Hotel broke the law. A contract is two people agreeing on terms, without a discrepancy. Harvey paid for a room, with the promise he would NOT be charged until it was used. It was NOT in the terms or HIS PROBLEM that the property was sold. What the hotel did was actually fraud. They breached a contract and then benefited themselves from it. If they can’t keep their books straight, it is CERTAINLY NOT the customer’s responsibility to pay the price. Regardless of the fact if Harvey’s son affirmed he wanted the one, he was not the party who was paying. The only exception would be if Harvey’s son had power of attorney over his decisions. At least, that is my understanding here. I am not a lawyer, but this sounds pretty clear cut.

    If I were this gentlemen, I wouldn’t settle on a 56 dollar refund. I would contact the state attorney general office on the basis of fraud. You’d be amazed at how much the state attorney general’s office will do for the consumer. If Harvey really wanted to press this issue, he could probably have a nice case, at least in small claims. Unless the hotel can point out FINE PRINT that said they can FREELY charge him, up the price, and then change the terms as they see fit (which even the best legal mumbo jumble probably wouldn’t allow), he’d have a good chance of winning. Just because his credit card didn’t side with him, doesn’t mean a judge wouldn’t. To say the least, I’d be at least contacting the attorney general, as I said.

  • Chris

    I’ve had to go the “credit card dispute” way before. Contacting the card company is smart if you think there might be a possible fraud issue. Simply contacting them to initiate the dispute claim does just that: “initiate” or start the claim which can take some time to resolve one way or another. I like to think that card companies care about their cardholders. I’m thinking I am really glad I don’t have an AMEX right about now too.

    Going that way before exhausting the hotel avenues for resolution is just the easy and, yes, much less time-consuming way. Trying to work through the red tape with a company you probably have little knowledge of can be tough for an outsider.

  • Bill

    The whole thing sounds fishy. Why was it called “refundable” if they weren’t supposed to pay in advance? It would be a postpaid reservation if it was pay on check out.

    There is not enough information here to properly understand what happened in my mind.

    I see “prepaid non refundable” reservations, and “postpaid” ones in the places I book a hotel.

  • red

    In my opinion, Holiday Inn’s future reservations should have listed everyone and given it to Wyndham.
    Harry had decided to pay a higher charge so that if a change was needed, it would be without incurring an additional charge.
    When Wyndham charged Harry’s card, he could have a balance that was put him over his available credit.
    Plus, he may not have the available funds to cover the early charge.
    Should Harry not have the available funds, then he would have had to pay additional finance and interest charges.
    Big deal Wyndham refunded $52. That was not the original contract.
    The way I understand these situations, the new company must uphold the original contact, unless they contact the other party.

  • Carver

    To the various armchair attorneys a couple thoughts

    Wyndham’s actions do not remotely amount to fraud. I doubt an attorney general would be remotely interested in this. This is a straightforward contract dispute. The hotel made good on the difference between the rates. Nothing else to see here.

    As far as new company goes, if you read the terms and services of some of these contracts, they specify what happens in case of a reflagging. That’s what controls in these cases.

  • Jennifer

    A very confusing situation. Seems rather cut and dried to me but then there’s always more than meets the eye. When a company buys another company, the contract specifies whether it buys the assets and liabilities, or just the assets. In this case, HI should not have received any of the customer’s money because the hotel was re-flagged before his stay. Wyndham should have honored the rate because they bought the hotel with those reservations already confirmed.

    As far as AX, I have never had them deny a dispute. Most of the time, I have never even had to document a complaint. The charge is simply removed. I have no complaints with AX on that score. Other issues, certainly but that’s for another day.

  • Carver

    @Jennifer

    You make a good point. However, reflagging of a hotel is often not an ownership change but rather a change of association or franchise. So there is no purchase so to speak.

    Part of the confusion that many are having is that when you make a reservation with a hotel, its unclear who the contract is with. Is it the chain or the individual hotel? Depending on the T&C and how the reservation was made it might be either or both.

    So we cannot make any assumptions about this situation.

    Additionally, rebranding is not a pleasant thing. It usually means that the hotel and the original chain aren’t really too pleased with each other and probably aren’t being overly cooperative.

  • Steve

    I was surprised to learn a couple years ago that when a hotel is sold and rebranded, the former brand takes zero responsibility for making sure the transition is smooth for people who made reservations prior to the change. In my case, my reservation disappeared when the brand was changed and I was not notified at all; the only reason I found out was because I tried to look up the location on the corporate website a couple weeks prior to my vacation in order to print out driving directions and there was no record of a hotel by that brand in that town! The corporate “customer service” line was no help at all and wouldn’t even apologize, stating that it was the responsibility of the individual property, blah blah blah.

    It worked out for me in the end; the new management was very helpful and even honored the rate for which I had booked the room on my word alone (the hotel had been rebranded as a more upscale property and the rates went up more than 50%). The result was that I was glad to give my business to the new owners…and I have not stayed at ANY hotel of the former brand, since apparently if the hotel is sold they will cancel my reservation without even telling me. Nice, huh?

  • y_p_w

    I tried making a mock reservation for a fully refundable stay on the Holiday Inn website. The terms and conditions didn’t mention anything about what would happen if the location were “reflagged”. However – I’m thinking that if the location is independently owned (their website states that most locations are), the reservation is made with Holiday Inn and not with the franchisee.

  • Justin

    @ Carver, I think you are wrong and this is clearly fraud. A customer was sold one thing, and given the bait and switch. I can’t sell you a car, then when you decide to pick it up, give you another model and simply refund the difference on the lesser product. That’s not how things work. This person paid for a room and expected not to be charged. Not only did Wyndham change the terms of the contract, but then they upsold the charge and gave him a bait and switch. You’d be amazed what the attorney general will do. I contacted mine several times and I’ve gotten pretty good results out of them, when businesses have done wrong. Hell, when Sprint was screwing my account and OVERCHARGING monthly, the Ohio Attorney General got in touch with them. Let’s say the problem was QUICKLY resolved.

  • carver

    @Justin

    No, I’m not wrong. I am a practicing business attorney. Fraud has a very specific legal definition which these facts do not even come close to making; not the least of which is an intent to deceive.

    The hotel did the right thing. Presumably the OP received the type of room that he requested. Additionally, he received the difference between the non-refundable and refundable rate. The OP has been made whole. What more is the OP entitled to?

    To use your analogy. IF the OP orders a car with a luxury trim line but the dealership only has the regular trim line, there are two options. Cancel the order or the dealership refunds the difference. In this case the latter option was taken.

    The attorney general would be very annoyed at having his time wasted on this.

  • J

    I think Rhonda has a good point — they said the son approved the rate. He probably was called, but the parent was not. I don’t see what else they could have done ahead of time if the reservation was in the son’s name.

  • Mike

    @carver yes, I would assume that refunding the difference would have been appropriate. However I would wonder what the circumstances would be like if the charge had caused any overdraft fees, or any other type of hardship, or as much as it may be unlikely, a ding of a credit report because of the charge. Would I be wrong to assume that the hotel would be responsible for making sure the person was compensated?

  • Justin

    @ Carver,

    You pointed out the flaw in your argument. THEY DID NOT approach him to cancel but went ahead and charged. Only after Chris got involved did they offer him the difference. So they were MADE MORE THAN WHOLE, which would be fraud until the OP was refunded. Circumstances taken into account, I would still be calling the attorney general. This hotel ACTED in poor faith and only caved when put under pressure of a nationally syndicated ombudsman. Obviously, had they settled, we wouldn’t have been reading. So, their actions warrant an investigation by the state if you ask me….

    What becomes of those who DO NOT KNOW about Chris?

  • Carver

    @Mike

    Alas, that would be under the term consequential damages which are generally not compensable unless either reasonably foreseeable or contractually mandated. The OP would be SOL.

    @Justin

    We have to be carefuly throwing around loaded word like fraud. It might be helpful to know what fraud means. Fraud has the following elements 1)A statement of fact, 2)that is false, 3)and known to be false at the time its made, 4)that is relied upon by the hearer, 5)to his detriment.

    Each elements must be met in order for there to be fraud. At least elements 2-5 are missing. Hence no fraud.

    Additionally, as long as the hotel provides a room generally in conformance with the contract, the hotel is in substantial conformance with the contract. Anything else is a minor breach of the contract, left to the civil courts, not criminal law.

    In this case, the “fraud” is basically in charging the agreed upon price earlier than the OP anticipated. Hardly a major breach of the contract.

    The AG office would not be interested.

  • Justin

    @Carver,

    I think you are forgetting ONE KEY fact in your argument. They charged his credit card without authorization. Not only that, but they charged him too much intentionally. That right there is fraud without any other argument.

    That meets ALL 5 of your definitions.

    1) Room is prepaid but not to be charged until services rendered
    2) Client based his booking upon this promise but it was intentionally broken
    3) Hotel was aware of its policy at time client purchased service
    4) Customer relied upon this agreement when purchasing the room.
    5) Customer COULD have suffered Overages on his credit card, been charged overdraft fees, high interest as he or she was NOT expecting to receive the bill until such time services were rendered.

    Maybe I am not a lawyer, but all those definitions seem pretty clearly met when the hotel went ahead and “Confirmed” the room on their own volition without getting the consent of the card holder. Not to mention, they upcharged him too.

  • Carver

    @Justin

    I admire your tenacity, but at some point it might be prudent to concede that the practicing business attorney might have an insurmountable advantage. *smile*.

    You cannot prove or even adequately make a prima facie case for fraud because.

    You cannot prove the hotel lied. The hotel no doubt operated consistent with its established policies according to the negotiated contract between itself and the franchising chain. All bookings are subject to that agreement.

    So when you make the assumption that the hotel promised not to charge the guest before arrival, that’s a false assumption. Again, all bookings are subject to the franchise contract which almost certainly contemplates the procedures for guests who booked while the hotel was under Chain A but changes in the interim to Chain B.

    Thus there are two possibilities

    Scenario 1: The hotel operated consistly with the agreement in which case there is no untrue statement.

    Scenario 2: The franchise agreement is silent and the hotel’s GM made a command decision. In which case you lose the prong of knowledge of falsity at the time of the making of the statement

    Under either scenario, the elements of fraud are not met.

    The only way to have fraud would be if at the time of the booking, the hotel has made a decision to charge credit cards early and not tell anyone. That would be a bit farfetched.

    You should also know that fraud is disfavored so that the elements are very strictly construed.

    .

  • Justin

    @ Carver,

    I’m going based off what the poster stated. If that is true, then there would be fraud. Then again, I’d think that MOST hotels and airlines would push the charge at the time of booking. I don’t know this specific chain’s policy. If we take the customer @ face value, then hotel would be wrong. Taking your statement at face value, then you are right. It’s all a matter of which side is accurately representing themselves here, correct?

    “I assumed the hotel would charge my credit card at the end of my son’s stay. But somewhere between the time I made the reservation and the time my son checked in, the Holiday Inn converted to a Wyndham, and my credit card was charged the full $753.”

  • y_p_w

    Again – I looked at a mock reservation at a current Holiday Inn location. I have noted that they do mention that advance purchase reservations are non-refundable. The only terms I saw stated that there was a cancellation penalty of the first night’s rate (plus taxes) for failure to cancel before 6 PM the first night and an implication that the stay is fully refundable if canceled before the deadline. They don’t say either way if they won’t charge in advance of the stay. I tend to agree that it would be fraud if he tried to cancel before the appointed time and they refused to refund the charged amount. However – they were never able to test that out since his son completed the stay.