Lies, Scams, and What You Can Do About Them

Travelers—and consumers, in general—get fed a lot of lies. And unless the lies are part of outright scams, government enforcement agencies act slowly, if at all. One reader asked about a specific situation:

“Why haven’t there been consumer protection laws or class-action lawsuits concerning the often seen cruise line advertising of ‘free air?’ It is clearly a fraud, because anyone who wants to arrange their own air travel receives ‘air credit.’ So how can they justify the term, ‘free’ air?”

The short answers are (1) “because governments aren’t interested,” (2) “because lawyers probably couldn’t find big enough monetary damages,” and (3) They can’t justify it but they do it, anyhow.” Several years ago, I compiled a list of some of the travel industry’s false and misleading promotional techniques, and the situation certainly hasn’t improved since then. I used the metaphor of a man walking down a street and observing various promotions along the way:

• First, he passed a restaurant had a big banner in the window displaying “Free Eggs!” with a tiny-type note saying “with the purchase of bacon for $7.99.”
• A few doors down, he saw an appliance store featuring “Side-by-side refrigerator, only $499,” with more mouse type explaining “for the refrigerator compartment, plus $399 for the freezer compartment.”
• Along the same street, he passed a shoe store advertising “Nike shoes, $29;” in this case, the mouse print said “per shoe when bought in pairs.”
• He next looked across the street, where a big billboard headlines “Brand new Lexus, $11,999,” with the by-now expected footnote, “per person based on five-passenger sedan.”

Let’s Take a Look at Those Lies

Hardly anything is really “free.” Nobody has ever repealed the natural law, “there’s no such thing as a free lunch.” “Free” is easily the biggest lie travelers or any other consumers hear from suppliers:

• Nothing is truly “free” if you have to buy or pay something else to get it, and
• Nothing is truly “free” if it’s bundled into a package and you can buy the rest of the package, minus the “free” part, for less than the full package price.

Thus, a second companion ticket that you sometimes get when you buy a first ticket at the regular price is not “free.” Similarly, a 5-night hotel stay at the regular price for 4 nights does not give you a “fifth night free.” And, in our reader’s case, the air isn’t “free” if you can buy the cruise for less than the price with “free air” included.

There are lots of honest ways of describing those promotions: “Two tickets for the price of one” would be fine, as would be “20% off if you stay 5 nights,” and pricing the air and cruise separately. But not “free.” If those extras were truly free, you could say, “I’ll take the free companion’s ticket and forget the other one” or “I’ll just take that free fifth night and forget the first four.” Fat chance.

Special dishonorable mention: Suppliers sometimes offer something “free” if you make a qualifying purchase, then hike the price of the qualifying purchase—or tack on a “service” or “handling” fee—that, in reality, covers the added cost of what you supposedly get for nothing.

Clearly, the travel industry isn’t the only offender. Have any of you missed those awful “Free credit report” TV commercials where an unseen voice mumbles so indistinctly, at the end, that you probably don’t even hear that you get the “free” credit report only if you sign up and pay for some shopping service?

Price-Splitting

The travel industry loves price-splitting, and you’d see quite a bit more of it absent some governmental limitations. The most obvious case is the airline “fuel surcharge,” which—fortunately—the US Department of Transportation quickly squashed. I’ve covered this extensivelyWORD; the end result is you don’t see it with airfares.

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Hotels, however, are a different story, with their mandatory “resort,” “housekeeping,” and other add-ons that they exclude from the featured price. Sadly, there is no uniform federal legislation about hotel advertising and I’ve seen no evidence that any individual states are planning to do anything about these lies.

Some time ago, one rogue wholesale tour operator come up with the idea of splitting the true price of a tour package into a phony low-ball base, with a footnote, “plus 15% tax and service.” Of course, that add-on wasn’t really tax and service, it went right to the operator; travelers still had to pay the real tax and tips, if any, separately. Unfortunately, this operator was big enough that almost all of its competitors felt compelled to adopt the same lies. It took the FTC years of twiddling to settle an issue that should have been settled in a week, but the practice was finally stopped.

More recently, some cruise lines split their true rates into phony low-ball base rates, which they featured, plus about 15% to 20% more for “port charges.” As in the tour case, cruisers had to pay the real taxes separately; the entire “port charges” amount went into the cruise lines’ pockets. This one was stopped, quickly, by the Florida Attorney General’s office, and as far as I know, no lines are now doing it. Cruise lines also added fuel surcharges for a while, but they’ve stopped that for now.

Half the Real Price

Many airline ads promote their lowest fares as “each way based on round-trip purchase.” This ubiquitous lie is wrong, in two ways:

• The featured price does not come close to passing a “buyability” test that, in my opinion, should be a legal test for deceptive advertising.
• It harms those competitors, such as Southwest and Aer Lingus, that actually price their cheapest tickets one-way.

I once raided this issue at a “consumer concerns” seminar at DOT, but I found out later that one of the key undersecretaries had committed to allowing the deception to continue and nobody could override that decision. Pity.

Per-Person Pricing

Per-person, double occupancy (PPDO) pricing clearly defies any realistic “buyability” test. Unfortunately, it has become so common in cruises and tour packages that I suspect no consumer efforts will even get rid of it. But it’s absolutely inexcusable in hotel advertising, which I frequently see.

Any Hope?

To me, a basic fact of advertising is that lying in big print, then correcting that lie with a footnote, is still lying. Claims of “free,” split pricing, per-person pricing, each-way pricing, and such do not come close to passing a buyability test.

Normally, you’d like to think that a liberal federal administration would be amenable to stricter “truth in advertising” regulations. Unfortunately, the current administration has so much on its plate that truth in advertising is likely to be ignored for some time. That means continue to expect lies, lies, lies. Not a happy conclusion, but surely an accurate one.