Advice, please -- Whom Shall We Sue? (Non-Av)

[Jay Honeck]

Here are the facts:

1 .July 14, 2011, someone named "Victor Melee" made four reservations at our hotel using Expedia.com

2. Our intermediary, GenaRes, emailed and faxed us the information.

3. Information includes only the customer's name, and credit card info. Expedia makes sure not to provide us with phone numbers or addresses, lest we call them and offer them a better deal.

4. Guest no-shows, and we charge them.

5. Two months later, the card holder -- NOT named "Victor Melee" -- protests, and we are charged back for all four rooms. Since we only have 23 rooms, this is a major hit.

6. We fax the credit card company the printout we received from GenaRes, showing what they had received from Expedia. Slam-dunk, we win the protest, and the chargeback was reversed.

7. This happens two more times. We won both times.

8. The issue is now going to "arbitration", and we have been warned by our credit card processor that if we lose, we will be charged $2,000.00 -- $500 for each reservation -- in addition to the amount of the reservations!

We've got the reservations in writing, so it can't be a more open-and-shut case, but we risk losing $2,000.00 if we lose. I'm tempted to drop the whole thing and eat the loss, but the situation is so...wrong...that I can't seem to get over it.

IMHO, this is something the card-holder should be taking up with Expedia, as the source of the apparent fraud -- but, of course, we're a much smaller, easier-to-hit target, so they are effing us instead, with the full cooperation of the credit card and processing companies.

Mary's on the phone with Expedia right now. Of course, they have no record of any such reservation. This happens regularly -- Expedia's reservation "system" is as leaky as a screen door in a submarine, and their customer support couldn't be worse -- but it couldn't happen at a worse time.

Coincidence?

So...whom shall we sue? Do I drop the issue, and pursue the card-holder in small claims court? Of course, they are saying it wasn't them who made the reservation, and that their card number was used fraudulently.

Do I stop accepting Expedia-made reservations, since they obviously are not a trustworthy source of customer information and reservations?

Do I go after Expedia in small claims court? This incident is an indictment of their on-line booking system, and (IMHO) people are fools to use them to make hotel reservations. We've had SO many reservations from them that end up screwed up, it isn't even funny anymore.

What would YOU do?

 

[bluee]

Did the card holder report their credit card as stolen?

 

[TMetzinger]

I'd hire an attorney, and follow their advice.

What I don't understand is why you have dealt with protests three times.

If the facts are that they guy's a victim of identity theft, then it's on his credit card company (or whoever they laid that risk off to) to make good.

It seems to me that you acted in good faith at all times. Did the "cardholder" ever contact you directly?

 

[AdamZ]

Jay sorry you have to deal with this. My impression is that the card holder is not responsible to you. Think about if someone stole your car and ran a red light and hit someone else's car. They couldn't hold you responsible even though it was your car.

I suspect the arbitration is pursuant to contract with the credit card company or the processor. Whether you can recover from expedia or Genres will depend on whether you have a contract with them and what it says if you do. Sounds like the real lesson is that its not worth it for you to so business with Expedia.

 

[Let'sgoflying!]

Wow, did a search for Expedia, scams/cheats vendor and got huge numbers of hits, entire websites devoted to dissing them. Mostly consumers....so apparently they are playing both ends.

 

[denverpilot]

Any company who's idea of good operating practices is letting their Windows IIS web-server machines just crash until more than half a cabinet full of them (usually 80%) isn't running, then reboot the entire cabinet, probably has no business taking people's personal and credit card data. (Don't ask me how I know this.)

 

[weilke]

What does your agreement with genres say about their liability for bad reservations ?

It seems that in the entire CC system, the only entity that never looses is the cc-issuer.

How much of your business are you getting from expedia or genres respectively. Are they customers you want or are they more trouble than they are worth. I have dropped an HMO before simply for the PIA customers they referred to us relative to their poor reimbursements.

 

[Richard]

You have $2,000 at risk if you loose arbitration.

How much would you lose if you drop the whole thing?

Have you considered dropping the arbitration and naming Expedia in a separate action?

Even taking an atty's advice can be a toss up. Sometimes they play fast and loose with other's people's money. IOW, an atty may advise to drop the arbitration but not offer a sound, compelling reason WHY. BTDT

 

[stagecoachco]

Jay,

My husband works for Visa in the Arbitration and Compliance dept. and he says DO NOT file for arbitration, you will lose. The reason you will loose is that Federal Law requires that a cardholder gets full credit in the event of fraud (as they are claiming). In this case, since you never had the card in your possession to swipe (or imprint) to support, you are liable. This is the risk EVERY merchant takes when proccesing a credit card transation without having the physical card in possession (this includes over the phone, internet, etc.) Note, that getting the 3 digit number off the back of the card still doesn't protect the merchant from liability.

You could pursue the cardholder in small claims court if you think they are lying about the fraud, but it might be hard to prove to a judge.

Right or wrong, you will lose this case if it is filed.

If you want to talk to my husband about this PM me.

Tony

 

[mikea]

Any company who's idea of good operating practices is letting their Windows IIS web-server machines just crash until more than half a cabinet full of them (usually 80%) isn't running, then reboot the entire cabinet, probably has no business taking people's personal and credit card data. (Don't ask me how I know this.)

You do know how bad, bad, bad such a thing is, right?

https://www.pcisecuritystandards.org/merchants/index.php

I dunno how many rules an Expedia can break by virtue of being mind boggily big, but I know something about that.

 

[denverpilot]

You do know how bad, bad, bad such a thing is, right?

https://www.pcisecuritystandards.org/merchants/index.php

I dunno how many rules an Expedia can break by virtue of being mind boggily big, but I know something about that.

Oh definitely. I'm actually sitting here doing PCI audit/mitigation work right now, in fact.

You (as I) probably also know there's quite a bit of goofy stuff in PCI that's totally worthless too, on top of the good stuff. I get a huge kick out of the god-awful scanning tools that scream and holler about things being vulnerable that aren't...

Someone could make a fortune making a smarter scan tool. Problem is, they'd need a fortune to pay the coders to build it.

 

[Jay Honeck]

Jay,

My husband works for Visa in the Arbitration and Compliance dept. and he says DO NOT file for arbitration, you will lose. The reason you will loose is that Federal Law requires that a cardholder gets full credit in the event of fraud (as they are claiming). In this case, since you never had the card in your possession to swipe (or imprint) to support, you are liable. This is the risk EVERY merchant takes when proccesing a credit card transation without having the physical card in possession (this includes over the phone, internet, etc.) Note, that getting the 3 digit number off the back of the card still doesn't protect the merchant from liability.

You could pursue the cardholder in small claims court if you think they are lying about the fraud, but it might be hard to prove to a judge.

Right or wrong, you will lose this case if it is filed.

If you want to talk to my husband about this PM me.

Tony

Thanks for the tip. Can you ask him why it is me -- and not Expedia -- who is liable? THEY are the ones who accepted the credit card number.

 

[Jay Honeck]

I now more fully understand why most hotels treat guest reservations as worthless.

(We are the only hotel on the island that does not overbook by 15%, and then tell anyone who shows up later -- after all the rooms are gone -- to go stuff it, regardless of whether or not they have a "guaranteed" reservation.)

 

[N801BH]

Maybe I am old fashioned but a little explaining to me goes a long way...

Expedia contacts you with a customer who wants to book 4 rooms... Expedia provides you with the CC info and you run that CC number to get a confirmation of intent....
The customer does not show and Expedia claims its not their fault but they are the ones who were the middleman in this transaction and are the ones who provided a fraudulent CC number.

1- I would never take another order from Expedia.

2- spend alot of time trashing Expedia all over the internet on their apparent cooperation in booking scams.

3- Hopefully they will see the posting and try to sue you.

4- Then you simply say you have no knowledge of any order placed by Expedia for 4 rooms.

5- They would then have to produce evidence their scam order for 4 rooms was not the reason you trash them on the internet in court.

6- You show the judge the email from Expedia for the 4 rooms reserved and say WTF . ...

You are lucky the hotel is in Texas... They have little tolerance for scam artists... .

With all that said, another poster said it best... NEVER take another reservation from Expedia and make sure you post this scam all over the internet. YMMV.

 

[Jay Honeck]

With all that said, another poster said it best... NEVER take another reservation from Expedia and make sure you post this scam all over the internet. YMMV.

Unfortunately, I just reviewed our revenue sources.

In 2010 (our first year open), 11% of our bookings came from Expedia.

This year, it's been 18%.

They've got us right where they want us.

 

[N801BH]

Man.... I really feel for ya..... The goose that lays the golden egg is somewhat unpredictable...

 

[Jay Honeck]

Man.... I really feel for ya..... The goose that lays the golden egg is somewhat unpredictable...

And remember, Expedia isn't just "Expedia". They have all sorts of little sub-agents and weird little boutique-sounding webpages on-line that you can book through -- that come across (to me) as being from "Expedia".

So if I shoot Expedia in the foot, I lose THEM too.

Crap, this just gets worse as the day goes on...

 

[BillTIZ]

Unfortunately, I just reviewed our revenue sources.

In 2010 (our first year open), 11% of our bookings came from Expedia.

This year, it's been 18%.

They've got us right where they want us.

Of the expedia bookings, what % are no shows that pay, what % get contested and charge back. Are you making $ or losing $ with expedia.

I'm sure you have a "no reservation if not redeemed by time" clause so you can rent the room to a walk in after 6pm.

 

[SCCutler]

Jay, you know how every once in a while, someone says, "Read the POH?"

Well, in my immediate analogy thereto:

Pull out the agreements you have with whomever it is you have agreements with - Expedia, GenaRes, whomever. REad it and see what you agreed to - I bet it's pretty straightforward.

I'll be glad to read it if you like. But you have to find it, first!

/s/

 

[Jay Honeck]

Of the expedia bookings, what % are no shows that pay, what % get contested and charge back. Are you making $ or losing $ with expedia.

I'm sure you have a "no reservation if not redeemed by time" clause so you can rent the room to a walk in after 6pm.

Nope, I refuse to run a business that way. In fact, were it up to me, that whole "if you're not there by 6 PM, you are screwed" way of doing business would be illegal.

We treat your reservation as the CONTRACT it is. I will hold it for you all night, whether someone walks in with $500, or not. It's the only honorable way to do this business, and I despise the hoteliers that routinely screw their guests.

That's what makes this situation so difficult. We had NO input with the guest, and got screwed for it.

 

[RotorAndWing]

Unfortunately, I just reviewed our revenue sources.

In 2010 (our first year open), 11% of our bookings came from Expedia.

This year, it's been 18%.

They've got us right where they want us.

The answer I give is one they usually don't understand, but it's really true: We NEVER got into the hotel business because we wanted to make money.

We NEVER got into the hotel business because we're even all that interested in hotels.

We got into the business because we wanted to hang out with interesting pilots from all over the world.

 

[Jay Honeck]

"Not wanting to make money" doesn't mean I want to lose it. LOL

 

[BillTIZ]

Nope, I refuse to run a business that way. In fact, were it up to me, that whole "if you're not there by 6 PM, you are screwed" way of doing business would be illegal.

We treat your reservation as the CONTRACT it is. I will hold it for you all night, whether someone walks in with $500, or not. It's the only honorable way to do this business, and I despise the hoteliers that routinely screw their guests.

That's what makes this situation so difficult. We had NO input with the guest, and got screwed for it.

I've relied on the hotel keeping my room for me more than once. But I've always called that I was running late. I have not used Expidia, Orbitz, travelocity. I have used Hotel.com twice with no problems. I normally use the brand name chains web reservation system directly. Or call the hotel directly.

 

[Maxmosbey]

I now more fully understand why most hotels treat guest reservations as worthless.

(We are the only hotel on the island that does not overbook by 15%, and then tell anyone who shows up later -- after all the rooms are gone -- to go stuff it, regardless of whether or not they have a "guaranteed" reservation.)

That has never happened to me no matter how late I've checked in. Just checked into a hotel in San Jose California at 9:00 at night, and my room was waiting for me.

 

[Everskyward]

That has never happened to me no matter how late I've checked in. Just checked into a hotel in San Jose California at 9:00 at night, and my room was waiting for me.

We sometimes check in to hotels at weird hours of the night too and I can't remember having a guaranteed reservation and no room available unless there was some kind of screw-up (reservations made for the wrong night). What does happen on occasion is that we will cancel past that deadline and the rooms will get charged even though we are not occupying them.

 

[wsuffa]

Perhaps, Jay, you need to think about prepaid reservations. Or at least prepaid from Expedia. More than one hotel I've been to offers a much lower rate for prepaid/non-refundable ressies.

 

[N801BH]

Nope, I refuse to run a business that way. In fact, were it up to me, that whole "if you're not there by 6 PM, you are screwed" way of doing business would be illegal.

We treat your reservation as the CONTRACT it is. I will hold it for you all night, whether someone walks in with $500, or not. It's the only honorable way to do this business, and I despise the hoteliers that routinely screw their guests.

That's what makes this situation so difficult. We had NO input with the guest, and got screwed for it.

Personally I would run a hotel just like Jay is doing......

If someone books a room, I would run the card and hold the room till check out time the next day.. After all , it is a contract and the person is being charged for it... If for some reason they are delayed and show up at 10 am the next day and the check out time is 11 am they get the room for 1 hour.... What part of 'they paid for it' don't some people get ? IMHO.

 

[Palmpilot]

I had a guaranteed reservation at the Best Western in Lander, Wyoming this summer that I was unable to make use of due to mechanical difficulties in Nevada. I didn't call to cancel because it was after the cancelation deadline, and I just assumed they would go ahead and charge my credit card, but they never did. I'm thinking maybe they were not fully booked that evening, so maybe they figured it didn't cost them anything.

 

[Jay Honeck]

That has never happened to me no matter how late I've checked in. Just checked into a hotel in San Jose California at 9:00 at night, and my room was waiting for me.

Every chain hotel on this island (and almost all in Iowa City) over-book by 15%. This is to make up for the fact that so many people who say they're coming simply never show up.

If they DO show up, after the hotel has sold their room to someone else, they are "walked" -- sent down the street to another hotel. IMHO, this is despicable.

We do it differently. We treat reservations as a contract -- and VERY clearly explain that if you don't who up, you will be charged. IMHO, this is the honorable way to do business.

I have had people in tears in my lobby, after being "walked" from a chain hotel on a sell-out weekend. Of course, we didn't have any availability, and their vacations were ruined -- thanks to the unethical act of over-booking.

That won't -- can't -- happen at our hotels.

 

[Everskyward]

Every chain hotel on this island (and almost all in Iowa City) over-book by 15%. This is to make up for the fact that so many people who say they're coming simply never show up.

Are they charging the no-shows for the room? If so, what do they need to make up?

 

[Jay Honeck]

We sometimes check in to hotels at weird hours of the night too and I can't remember having a guaranteed reservation and no room available unless there was some kind of screw-up (reservations made for the wrong night). What does happen on occasion is that we will cancel past that deadline and the rooms will get charged even though we are not occupying them.

The practice of over-booking won't hurt you, most of the time, because large hotels rarely sell out. You won't notice anything amiss, because they CAN'T overbook unless they're sold out.

Special event weekends (like college football in Iowa, or every summer weekend here on the island) are different. Every available hotel room will be booked for 100 miles, which means that over-booking -- and the resulting "walking" of those who show up late -- will present a real hardship for many.

Imagine you've brought your family here from San Antonio. You've got a reservation -- guaranteed with your credit card -- at the Holiday Inn Express. You got off work late, and it's a 2+ hour drive. You don't get to the island until after 9 PM, and then you've got to sit in the ferry line.

You roll into the Holiday Inn Express at 10:30 PM. The odds of them honoring your "guaranteed" reservation are ZERO. They will have sold your room to a walk-in hours ago.

They are scoundrels, and I will not run a business that way.

 

[Jay Honeck]

Perhaps, Jay, you need to think about prepaid reservations. Or at least prepaid from Expedia. More than one hotel I've been to offers a much lower rate for prepaid/non-refundable ressies.

And rely on Expedia to collect from my guest -- and pay me?

Perhaps through some other venue -- but certainly not through Expedia.

 

[N801BH]

The practice of over-booking won't hurt you, most of the time, because large hotels rarely sell out. You won't notice anything amiss, because they CAN'T overbook unless they're sold out.

You've got a reservation -- guaranteed with your credit card -- at the Holiday Inn Express. You got off work late, and it's a 2+ hour drive. You don't get to the island until after 9 PM, and then you've got to sit in the ferry line.

You roll into the Holiday Inn Express at 10:30 PM. The odds of them honoring your "guaranteed" reservation are ZERO. They will have sold your room to a walk-in hours ago.

They are scoundrels, and I will not run a business that way.

If I have a "guaranteed" reservation that was run on my credit card and I show up and the room was sold to someone else I can assure you their would be HELL to pay for some night manager....

 

[Everskyward]

The practice of over-booking won't hurt you, most of the time, because large hotels rarely sell out. You won't notice anything amiss, because they CAN'T overbook unless they're sold out.

We've often had to stay at alternate hotels because the first choice had no vacancies. We've sometimes had to drive to another town to get rooms. However, it always seems they are upfront about telling the person who is booking the rooms.

 

[Jay Honeck]

Are they charging the no-shows for the room? If so, what do they need to make up?

Nope. That's the trade-off.

They pretend you have a guaranteed reservation -- and don't honor it. In return, they "make up for it" by not charging you if you no-show.

It's a lame attempt (IMHO) to have the best of all worlds. They don't want to pi$$ people off by charging them for no-showing, so they over-book by 15%, in an attempt to guess how many people won't show up for their "guaranteed" (not!) reservations.

They are trying not to pi$$ people off by forgiving guests who don't show up, but end up ticking off their single most important customers -- their guests who actually DO show up.

It's a stupid, unethical practice that I am embarrassed to say is widespread in my industry.

 

[Jay Honeck]

If I have a "guaranteed" reservation that was run on my credit card and I show up and the room was sold to someone else I can assure you their would be HELL to pay for some night manager....

Well, you've been warned. You're welcome.

Friends don't let friends stay at chain hotels...

 

[Maxmosbey]

Every chain hotel on this island (and almost all in Iowa City) over-book by 15%. This is to make up for the fact that so many people who say they're coming simply never show up.

If they DO show up, after the hotel has sold their room to someone else, they are "walked" -- sent down the street to another hotel. IMHO, this is despicable.

We do it differently. We treat reservations as a contract -- and VERY clearly explain that if you don't who up, you will be charged. IMHO, this is the honorable way to do business.

I have had people in tears in my lobby, after being "walked" from a chain hotel on a sell-out weekend. Of course, we didn't have any availability, and their vacations were ruined -- thanks to the unethical act of over-booking.

That won't -- can't -- happen at our hotels.

If you say so Jay, but that has never happened to me, nor has anyone ever told me that it has happened to them. I do plenty of traveling, and I show up late a lot of the time, and I'm just saying that it has never happened to me. If I have a reservation, and if I don't cancel it before the deadline that they say I can cancel it, I would expect to pay for the room. But if I reserve a room with a credit card, I expect that it will be there when I get there. It always has been there when I got there. I mean, that is the reason for reserving a room. What is the reason for reserving a room if the hotel will not hold it for you?

 

[Maxmosbey]

Well, you've been warned. You're welcome.

Friends don't let friends stay at chain hotels...

I try to stay in chain hotels for exactly that reason. They generally aren't so desperate.

 

[dmspilot]

I think there is confusion about the difference between a confirmed reservation and a guaranteed reservation. A confirmed reservation is usually only held until 6pm or so. A guaranteed reservation is supposed to be just that--guaranteed. A hotel that is giving away guaranteed reservations to other customers is not only acting unethically and in bad faith but it has also breached its contract.

I would expect a person that owns a hotel to know the difference, but have seen no indication of that because I haven't seen either of those two "magic words" mentioned.

 

[Jay Honeck]

It always has been there when I got there. I mean, that is the reason for reserving a room. What is the reason for reserving a room if the hotel will not hold it for you?

My point exactly -- and it's why we do things differently.

If you've never been walked by a chain, you've probably been lucky enough to not arrive late on a night when there is a big event in town.