Nebraska AG Sues Hilton Hotels for Deceptive Fees
By Scott Stewart
The Daily Record
A lawsuit filed on behalf of Nebraska citizens alleges that a multinational hotel company has misled consumers for years by hiding the true price of rooms and by charging hidden resort fees to increase profits.
Nebraska Attorney General Doug Peterson filed the lawsuit Tuesday against Hilton in Lancaster County District Court, alleging that the hotel chain’s deceptive and misleading pricing practices and failure to disclose fees harmed consumers and violated the state’s consumer protection laws, according to a news release.
The lawsuit seeks to force Hilton to advertise the true prices of its rooms up front, provide monetary relief to harmed Nebraska consumers and pay civil penalties.
“For years, Hilton has misled consumers in Nebraska regarding the true cost of certain Hilton hotel rooms,” Peterson said in a release announcing the lawsuit. “They failed to heed warnings from the Federal Trade Commission and the mounting complaints from their own customers.”
The lawsuit names the Virginia-based Hilton Dopco Inc, aka Hilton Domestic Operating Company Inc., as a defendant, and the allegations spans multiple brands, including Hilton, DoubleTree, Embassy Suites, Waldorf Astoria, Homewood Suites, Hilton Garden Inn, Hampton Inn and Tru.
Hilton is accused of “drip pricing,” an unlawful trade practice where a portion of the hotel rate is hidden until the booking process. The hidden portion is referred to as “resort fee,” “resort charge,” “daily mandatory charge” and “daily resort charge,” according to the lawsuit. The state alleges that Hilton has engaged in the practice since at least 2012, which has misled consumers and prevented effective, accurate comparison of hotel room rates.
An investigation into hotel industry pricing practices by attorneys general in all 50 states and the District of Columbia provided the basis for the Nebraska lawsuit, which states at least 78 Hilton hotels charge a daily or resort fee.
The fees range from $15 to $45 per room per night, and they are not disclosed up front – meaning searches on third-party online travel agency websites like Priceline and Expedia show the incomplete price for those rooms.
The Federal Trade Commission warned the hotel industry in November 2012 that drip pricing via resort fees may violate federal consumer protection law. The lawsuit also detailed specific consumer complaints regarding Hilton’s room pricing practices.
The lawsuit alleges Hilton has violated the Nebraska Consumer Protection Act and Nebraska Uniform Deceptive Trade Practices Act. Peterson asks for a civil fine of $2,000 per violation, as well as restitution and legal costs.
“I ask the court to order Hilton to make necessary and meaningful changes to its business practices – but most importantly, to be transparent about its prices,” Peterson said in a release.