Online Travel Agents Are Misusing Consumers’ Data, UK’s Upper House’s EU Committee says
Online travel agents are taking advantage of customers by spying on their computer history and using their details to charge them more for holidays, a House of Lords report has found, as peers call for a top-level investigation.
The upper house’s EU Committee condemned the online travel industry, accusing websites of misleading customers through rigged pricing, fake reviews and doctored search options.
It warned online travel providers are offering controversial “personalised” pricing in which information provided, or revealed, by customers is being used to determine an individual price for a particular item or service.
Websites are able to gather information about potential customers via web cookies which allow them to “remember” people’s computers, the preferences they have selected, and how many times they have visited a page. Sites are then able to bump up prices for people who have repeatedly visited them or viewed a particular holiday multiple times.
Committee chairman and Labour peer Lord Whitty said: “We heard of an array of worrying practices by websites that simply aren’t transparent enough and leave consumers vulnerable to exploitation – from fake reviews to personalised pricing, from baffling privacy agreements, to rigged displays of search results.
“Even though some of these price restrictions have been banned, we heard allegations that online travel agents had intimidated hotels for offering better deals to their competitors. “Witnesses described a number of practices by online travel agents intended to mislead consumers.
The committee also heard claims that online travel agents have intimidated hotels which gave better rates to their competitors, and used deliberately misleading messages about vacancies, and so-called “shell websites” which pretend to be the hotel website to take bookings at a higher rate. Peers have insisted a “rapid” investigation by the Completions and Markets Authority, the consumer watchdog, is needed to bring the industry into line and prevent holidaymakers from being short-changed.
To help holiday identify rogue websites the committee has recommended the implementation of a traffic light-style system to assign firms with a green, amber, red mark. It said this kite-mark safety system should be forced on all websites and apps across the EU so customers can see which ones can be trusted most. It also calls for a revamp of consumer protection laws to require online platforms to fully disclose how they rank and present search results, publish ratings and reviews, and when they use personal data from consumers to determine prices.
Carolyn Jameson, chief legal officer at Skyscanner, a travel website, said: “Unscrupulous firms carrying out the bad practices outlined in the report give the travel industry a bad name. There is definitely a need for more clarity around the ownership of online data and we think the traffic light system is a sensible way of letting customers know who they can trust.”
James Daley, director at Fairer Finance, a campaign group, said:” Because there’s so much competition and pressure on providers to keep headline prices down, they are resorting to finding ways of making money elsewhere. Trading standards has the powers to slap companies on the wrist for fake reviews, but it does not have enough resources to enforce action.”
A spokesman at the CMA said: “We welcome the Lords’ report which is a valuable contribution to ongoing wider consideration of the impact of online platforms on competition and consumers, and to ensuring our laws and process are fit for the digital age. Indeed, we were very pleased to provide both written and oral evidence to the inquiry as ensuring effective competition in online markets is a strategic priority for the Competition and Markets Authority. We will now review the report and consider its findings carefully.”
In a bid to get customers to part with more of their cash when booking holidays, some firms are employing a range of sneaky tactics:
Protect your data
Travel websites can store information about your computer through “cookies”, which allow them to record your web movements. For example if you’ve eyed up a holiday several times they could log this and raise the price. To prevent this from happening clear the cookies on your computer and remove your browsing history. Also be wary of filling out surveys and detailed forms about your personal information.
Watch out for jumping prices
Sometimes when you click on a deal the price jumps, while some charges are revealed only at the end of the booking process. This is because websites apply an automatic discount for a “service charge” when you first select a flight or holiday. This is only revealed after you’ve chosen travel dates and filled in your personal details.
Beware rip-off credit card fees
To pay by debit or credit card an extra fee is often charged. These can vary wildly depending on what type of card you use. Sometimes certain deals and discounts are only available to customers using specific types of cards so pay attention how fee movements when you select your payment method.
Avoid fake travel agents
According to the UK’s National Fraud Intelligence Bureau fraudsters are costing travellers £2.2m a year through fake websites, bogus adverts and email scams. If in doubt double check website addresses, research holiday firms’ credentials and make sure they belong to a recognized body, such as the association of British Travel Agents (ABTA).
Source: The Telegraph