Expedia Class Action Lawsuit Says Guests Overpay on Taxes with Third Party Bookings

An Expedia class action lawsuit alleges that the popular travel site overcharged consumers for taxes and fees.

Lead plaintiff Joseph Church says that consumers are led to believe the taxes and fees are assessed for payments made to the government, but that Expedia instead keeps those extra fees for their company.

The lawsuit explains that companies affiliated with Expedia like Reservations.com get all of their hotel inventory data to allow customers to book through Expedia. Expedia sets a net rate for the subsidiaries and then taxes are remitted directly to the hotels from Expedia after the guest has stayed.

The Expedia class action lawsuit says that once the taxes due are given to the subsidiary, Expedia then keeps the remaining money above and beyond the actual taxes for themselves. The lawsuit says that Expedia is illegally profiting from this marked up price that goes well beyond the actual tax rates.

The Expedia class action lawsuit says that these fees were sent from the third-party company to Expedia, but that the funds were pocketed at that point after the true tax prices were paid. As argued in the claim, a reasonable consumer expects that a taxes and fees amount added to their hotel stay is because of the obligation the hotel has to pay taxes on each night’s stay, but that the amount charged to consumers is more than the actual tax rates based on location.

The lead plaintiff in that Expedia class action lawsuit says he booked an Orlando hotel stay using Reservations.com. On his bill, $108.68 were listed as “taxes and fees.” He says his calculations of what should have been due in fees were only $69.79.

He alleges that Expedia kept the remaining funds as illegal revenue, a practice he claims is happening in numerous cases on at least Reservations.com, if not other third party websites.

The Expedia class action lawsuit argues that a class action is most appropriate for the resolution of these allegations since many consumers could have been affected by this wrongful practice. The lead plaintiff says that while the per-consumer amounts wrongfully charged are small, they can add up when considering the total volume of business done on these sites.

The class action lawsuit against Expedia contends that the company and its subsidiaries are operating a tax fraud business in addition to violating the Racketeer Influence and Corrupt Organization Act and engaging in theft and unjust enrichment.

The Expedia class action lawsuit seeks to represent Class Members who booked and paid for pre-paid hotel room reservations through the Reservations.com call center or website in which the room inventory was provided by Expedia from Jan. 1, 2014 through the filing of the suit.

The plaintiff and proposed class are represented by Steve W. Berman and Andrew Volk of Hagens Berman Sobol Shapiro LLP, James L. Ward Jr. and Ranee Saunders of McGowan Hood & Felder LLC, and Ian W. Freeman and John P. Linton Jr. of Walker Gressett Freeman & Linton LLC.

The Expedia Class Action Lawsuit is Joseph Church et. al., v. Expedia, Inc. et. al., Case No. 2:18-cv-01812, in the U.S. District Court for the Western District of Washington at Seattle.