Allegations of fraud have been levied against Priceline.com's
European hotel reservation system—Booking.com—but
the company has refused to comment for this article.
Having received no reply from the company's Amsterdam
headquarters, OfficialWire sought a statement from the company's
US-based spokesperson, Brian Ek, but he wrote in an email: "I
have no comment."
Shares of Priceline.com, Inc. fell more than 17 percent on
Wednesday, a day after the company suggested bookings growth could
slow. Shares of the online travel agency tumbled 17.1 percent,
or $20.03, to $97.17 on NASDAQ.
This story begins five days ago, when Yiorgos (George) Yiannios,
an employee of Booking.com, claimed that a number of
reservations made through the Booking.com system were
"fraudulent" and that he believed that the hotelier had made the
reservations to advance its guest reviews. Without waiting for a
reply from the hotelier, George deleted the hotel from
Booking.com.
According to an email written by Yiannios, the basis of his
claim was that several groups of reservations were made from the
same IP address.
Booking.com charges hotels a commission for using its website.
That commission ranges from 15-to-50 percent and they use a
"preferred hotel" scheme that implies that Booking.com has
vetted or even approved the hotel, when in reality the basis of
the charge relates to the hotel's position on the results page.
In other words, pay more and be listed higher in the
results.
In this case, despite believing that the reservations were
"fraudulent" (to use Yiannios' word), Booking.com charged the
hotel the full commission and demanded payment of these
'fraudulent commissions' before they would restore the hotel's
access to Booking.com.
In the days that followed, the hotelier was coerced into paying
several thousand Euros in commissions owed (but not currently
due) on the promise that Booking.com would restore the hotel's
access to the system.
Then, after paying the money, Yiannios refused to reinstate the
hotel's access.
OfficialWire wrote to Brian Ek and the exchange went like this:
OfficialWire [11:33am] - Brian, Perhaps you can help me with
this. Sir, I have been tasked with the job of following up on
some loose ends regarding a story we are working on, relating to
allegations of fraud, by your company, in connection with the
dealings of client reviews, hotels, etc. and to that end, I am
attempting to obtain a contact so that I can get answers to my
questions. Please reply with your contact's name and telephone
number and email address so I can present the specific questions
for reply.
Brian Ek [11:38am] - I don't know what you're talking
about.
OfficialWire [11:41am] - I wouldn't imagine that you would.
I have attempted to contact your company's headquarters for
comment. Since you appear to be a PR contact for the company, I
thought you might be able to assist with providing me the
contact details so that I could get a reply to my questions. In
the absense of that contact and replies, I will publish what I
have with[out] your company's imput. I working toward a 5pm deadline
today.
Brian Ek [11:49am] - I am the company
spokesperson.
OfficialWire [11:54am] - Great, so I should direct these
questions to you for an official comment? Please
confirm.
Brian Ek [12:24pm] - Yes.
OfficialWire [12:39pm] - 3 or 4 days ago, an employee of your company accused a hotelier in Europe who uses and has used Booking.com for some time of having made "fraudulent
reservations"; i.e. bookings that were not genuine. The employee
accused the hotelier of doing this in order to obtain positive
guest reviews. The hotelier denied this accusation immediately
and provided a very straight-forward explanation for what
happened, in writing. I have read that document. According to
the hotelier, despite this explanation, the hotel's page on
Booking.com was immediately removed without warning and without
cause. In the two days that followed, your company coerced the
hotelier to pay commissions owed to your company for July (which
were not yet due) on the promise of restoring the hotel's
presence on Booking.com. The hotelier complied immediately and
reiterated that it had done nothing wrong. Despite having paid
the money as requested, the employee for Booking.com refused to
restore the hotel's presence on Booking.com after the company
received payment. It would appear from the documents that I have
viewed that Booking.com has indeed acted fraudulently as
follows: 1. By obtaining money by deception on the pretense of
restoring the hotel's presence; and 2. By charging, demanding
(under the pretense of fraud) and receiving several hundred
Euros in commission for purported "fraudulent reservations" - if
the reservation were not genuine, then, it seems that your
company should not have charged a commission for them, and that
having made the determination that they were fraudulent, despite
what the hotelier has said, Booking.com is guilty of fraud if it
enriches itself on that basis. It may be that this is simply a
misunderstanding and that Booking.com will recognize that their
employee has made an error and the company may decide to restore
the hotel's presence and in that case, then, our story might not
have any legs, but if what the hotelier tells us is true; i.e.
that Booking.com coerced them into paying several thousand Euros
in exchange for restoring the hotel's Booking.com presence and
then didn't AND that it also charged, demanded and received
commissions for what Booking.com described as fraudulent
reservations, then I think we have a story here. I'd like your
comments please. I am going to press with my piece at 5pm (EST)
today.
Brian Ek [12:54pm] - Since you have shared no specifics, I
have no comment.
OfficialWire [12:58pm] - I am not sure what you're talking
about. I provided you the entire story. What specifics are you
requesting?
Brian Ek [1:07pm] - I think we're done with this exchange.
You have our response.
OfficialWire [1:09pm] - Ok, then, for purposes of my
article, I will say that Booking.com's official spokesperson
would not comment on the allegations and refused to provide a
reply to my question [i.e. What specifics are you
requesting?].
For a publicly traded company to literally force a hotelier to pay money that was not due, on the [false] promise of services, when the basis of more than 12 percent of those monies [commissions] [according to Yiorgos (George) Yiannios] was fraud, in our opinion, may warrant further investigation.
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Allegations of fraud have been levied against Priceline.com's
European hotel reservation system—Booking.com—but
the company has refused to comment for this article.
