Expedia - Traveling to Court

Consumers are always trying to find the best deal, and there is no shortage of companies ready to help.

Take Expedia - by all regards, a well-run company that cuts deals with airlines, hotels and other travel service providers, aggregates the offers and sells them to consumers at a discount price.

But some time ago, Expedia customers saw something that made them take notice - they were paying "taxes and fees" for their travel purchases. Nothing wrong with that, right?

Well, not so fast.

According to a complaint we filed, we think Expedia is overcharging consumers. Here's how: Expedia purchases hotel rooms at a wholesale rate, which it then marks up and sells to consumers. But as part of the process, Expedia tacks on what the company calls a "tax and service fees" charge.

What consumers don't know is Expedia is on the hook to pay tax on the lower wholesale rate, not on the higher rate it charges consumers.

What's more, our suit contends that Expedia rolls the tax charge in with the service fee to mask the financial slight-of-hand. We also contend that Expedia breached its contractual promise by charging "service fees" that bear no relation to the costs of servicing a reservation, but are simply designed to offset overhead and pad the profits of each reservation.

According to court documents, there could be as many as 15 million Expedia customers that booked a hotel and paid these fees. With that many people as potential class members, and hundreds of dollars spent on each booking - if you do the math, it adds up to a lot of zeros.

Since we've filed the case, Expedia has been fighting it, as one might expect. Earlier this month, the Court of Appeals denied a motion by Expedia to overturn the trial court's order making this a nationwide class-action.

With that out of the way, we are looking forward to represent Expedia customers in court soon. It's no vacation, but it beats unjust taxation without remuneration.

Stay tuned for more developments, or visit our site to learn more.