Ultimate Fares CEO says DOT’s $1 million fine is unwarranted
By Michael Fabey
The Transportation Department said its
proposal to assess a $1 million fine against
online travel agency Ultimate Fares and
its chief executive for allegedly misrepresenting air travel costs on its website was
meant to get the attention of the company
and CEO Roni Herskovitz.
“My jaw just dropped when I read
that,” Herskovitz said in an interview with
He said his company had been working
with the DOT to make sure its site met
the advertising and display standards, and
he thought it had done so.
2008, to Ultimate Fares, telling the company to bring its website into compliance
According to the DOT, the company
failed to fix its online issues and became
But Herskovitz said his company had
been in constant contact with the DOT
to try to change its site to meet the standards, and he provided examples of the
“I would send something, and they
would say, ‘No, that’s not quite right,’”
he said. “Then they told me to check out
He did and copied the same online rep-
resentations adopted by others.
He thought the Ultimate site was in
compliance last fall after the DOT stopped
responding to his company’s queries.
“I thought it was finished,” he said.
Then, in April of this year, the DOT notified the company that it was liable for a
$1 million fine.
Nature won’t adapt. It will disappear.
In the past 18 months,
the highest penalty the
DOT assessed for improperly displaying fares was
And even if the DOT still had issues,
Herskovitz said there was nothing to indicate that the DOT had grounds to impose
such a large fine and attempt to make him
personally liable for it.
In the dozen enforcement cases since
the beginning of 2008 where the DOT
cited a company or airline for failing to
properly display airfares or taxes and fees,
the highest assessed penalty was $105,000,
according to a Travel Weekly review of
those files. The average fine amount was
There were no personal fines levied
against any individual corporate officers, and the $1 million penalty assessed
against Ultimate Fares and Herskovitz is
nearly double the amount of all the other
fines combined in that time period.
More than two-thirds of those cases
were assessed against companies for failing to comply with DOT guidelines for
the display of airline fuel surcharges.
The DOT said it can’t discuss the Ultimate Fare case now because it is scheduled to go before an administrative law
judge in October.
But in a filing this spring, the DOT said
Ultimate Fares and Herskovitz have been
excluding fees and other charges from the
initial displays of airfares for more than a
year, a violation of DOT policies on unfair and deceptive practices and unfair
The core principle of those policies,
which applies to air carriers as well as
agents and other intermediaries, is that
fare advertisements, or Internet displays
for air travel or a package that includes air
travel, must state the full price to be paid.
The DOT also has specific guidelines regarding whether and how particular fees
and taxes can be broken out and stated
As with most of the other similar cases,
the DOT acted on its own initiative, not
because of any consumer complaints.
The DOT first sent a letter April 29,
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