Ultimate Fares Fined For Online Fare Advertising Violations

Published on: November 13, 2009

The Internet travel agency Ultimate Fares has been fined $600,000 and its owner $30,000 for violations of advertising regulations under a settlement approved by a U.S. Department of Transportation Administrative Law Judge (ALJ). The fine, which would be the largest ever assessed for advertising violations, will become final in 30 days unless the department decides to review the action or a petition for review is filed. An investigation by the department’s Aviation Enforcement Office found that Ultimate Fares failed to include the federal excise tax and the service fee it charged to consumers in fares published on its website between March 2008 and September 2009. This violated the department’s requirement that published airfares must state the full price to be paid including service fees and any ad valorem tax, such as the federal excise tax, which is assessed as a percentage of the fare. Ultimate Fares continued to omit the tax from its stated fares even after the Enforcement Office began its investigation, according to the consent order issued by ALJ Richard C. Goodwin. Ultimate Fares also failed to disclose which flights were being operated on a code-share basis as required by the department’s rules. In addition to the $30,000 penalty assessed against Ultimate Fares’ owner Roni Herskovitz, he also will be barred from any involvement in the online air travel agency business for 12 months. For more information, visit www.regulations.gov.