NAD Finds Fareportal Cannot Support Certain Claims Made at CheapOair.com, CheapOstay.com Websites

New York, NY – Jan. 10, 2013 – The National Advertising Division has recommended that Fareportal, operator of the online travel websites CheapOair.com and CheapOstay.com, modify or discontinue certain comparative savings claims made for airfares posted to the sites.

NAD is an investigative unit of the advertising industry’s system of self-regulation. It is administered by the Council of Better Business Bureaus.

The claims at issue were challenged by Priceline.com, Inc., including:

• “Save up to 65% at CheapOair.”
• “40% to 65% discount on airfare.”
• “BOOK NOW! Up to $20 instant Savings PROMO CODE TV20.”
• “Get an Extra $15 off. Hurry. Book now.”
• “Over 100 million exclusive wholesale fares.”
• Displaying separate prices for airfare and taxes.
• “CheapOair saves you time and guarantees the best rate.”

NAD also examined whether Fareportal’s claims implied that CheapOair and CheapOstay offered the best and lowest rates, leaving no reason for consumers to comparison shop for better rates.

The key issues before NAD were whether the price reductions advertised were true savings off a benchmark price, how to determine the appropriate benchmark prices and how to best disclose that benchmark to consumers.

During the course of NAD’s review, the advertiser modified the qualification of its “40%-65%**” claim to state “Discount as compared to unrestricted fares.”

The disclosures in the challenged advertisements stated that the discount is based on a comparison to “Y” class unrestricted international fares. NAD noted in its decision that Y class fares are among the most expensive fares available. Only nine percent of all tickets sold in the U.S. are sold at the Y class rate.

NAD determined that the new qualification of “discount as compared to unrestricted fares” did little to clarify the basis of comparison, given that consumer may not understand the meaning of “unrestricted fares” and given that the advertiser did not make clear at the outset the potentially large price differentials between the fares and the fact that substantially fewer bookings are made at unrestricted fare rates.

NAD recommended that the advertiser either discontinue its percentage-off savings claims or explain to consumers the basis for the claim in a way that makes clear the price differentials in the fare categories. NAD recommended that the advertiser avoid referencing seasonal sales in connection with percentage-off claims, given that savings are offered on an ongoing basis.

NAD recommended that the advertiser modify the “up to” savings claims in Google advertisements to avoid conveying the unsupported message that the basis of comparison is to competitors’ discounted fares and clearly disclose that the basis of the savings claim is a comparison to the applicable classes of domestic and international unrestricted fully refundable published fares.

NAD recommended that the advertiser discontinue offering routine prices as “sales” and, to the extent it wishes to make such savings for a limited period of time, more clearly disclose that the discount is limited to the cost of the booking fee and the expiration date of the offer.

NAD recommended that the advertiser avoid referencing in close proximity discounts that are automatically applied (“instant savings”) together with those discounts requiring consumers to manually enter promo codes to ensure that consumers can take advantage of the advertised savings.

Further, NAD recommended that the advertiser refrain from using terms such as Hurry. Book now!” and “Last Minute Deals” for promotions that do not immediately expire.

NAD recommended that the advertiser discontinue the unsupported claim “Over 100 Million Exclusive Wholesale Fares.”

Finally, NAD recommended that the advertiser more clearly disclose in immediate proximity to its “best price guarantee” the material limitation that consumers have four hours in which to find a lower fare.

Although Fairportal took issue with certain of NAD’s findings, the company said it would “take all of NAD’s recommendations into account in its future advertising.”

“Fareportal hopes that others in the industry will do the same,” the company said.