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SALEM, OR -- At least two Central Oregon hotels are among more than a dozen facing fines from Oregon’s Department of Justice, due to alleged violations of the state’s Unlawful Trade Practice Act. Attorney General Ellen Rosenblum sent letters to hotels that canceled reservations made for the August 21st eclipse. In some cases rates doubled or tripled after reservations were made. 

 

Hotels - including the Madras Motel 6 and the Stafford Inn, in Prineville - must reinstate the originally booked room at the originally promised rate or provide $500 to each impacted customer. They were also fined $100 per violation. The Stafford Inn is accused of 24 consumer violations and the Madras Motel 6 had 13. In the letter, Rosenblum said failing to anticipate the demand associated with the eclipse was not a defense for violating the law.
 
She also urges those who have reservations within 90-miles of the eclipse path confirm those reservations, immediately.
 
Hotels were issued warnings similar to this version sent to the Madras Motel 6:
We have reviewed the documentation you provided to the Oregon Department of Justice. The Oregon Unlawful Trade Practice Act (UTPA) prohibits a business from making unlawful, false or misleading representations concerning the offering price of or a person’s cost for services. Booking a reservation for a consumer at a certain rate, followed by the hotel either cancelling or increasing that reservation rate may constitute a deceptive practice under the UTPA.   Engaging in deceptive practices can result in court issued penalties up to $25,000 per transaction, plus attorney fees and investigative costs.

 

We understand that standard business practices for hotels involve setting rates in the fall for the next year. Failure to anticipate the 2017 Solar Eclipse (and the ensuing popularity of certain hotels during this time frame) before consumers started booking reservations is not be a defense to a violation of the UTPA. Moreover, your hotel is responsible for providing any third party (such as booking.com and hotels.com) with accurate rates. If your hotel did not anticipate the demand for this event before advertising its rates, the hotel must honor that advertised rate.

 

The UTPA authorizes the Attorney General to commence legal action to enjoin fraudulent, deceptive, or illegal business practices, and to obtain restitution, penalties and other relief. The Oregon Department of Justice reserves the right to proceed with an enforcement action against your hotel if you fail to correct these issues with consumers. Specifically, Motel 6 must commit to:

 

1. Relief for Consumers. Motel 6 has provided documentation that shows that 13 consumers reserved a room for a certain price and then were informed that that price would not be honored. Motel 6 must provide each consumer who reserved a room with your hotel for the 2017 Solar Eclipse with either (a) their originally booked room for the originally booked price; or (b) if that is not possible, Motel 6 must send each consumer a payment of $500 via certified funds sent directly to the consumer within 30 days of the date of this letter.

 

2. Payment to the State of Oregon. The UTPA provides for penalties up to $25,000 per a transaction, plus attorney fees and investigative costs. Notwithstanding, Motel 6 must make a payment to the state of $1,300 ($100 per a violation) via certified funds made out to the State of Oregon and sent to Karen Rounsville at the Oregon Department of Justice, Civil Enforcement, 1162 Court Street NE, Salem, Oregon 97301. This payment is due within 30 days.

 

3. Honor Future Reservations. Going forward, Motel 6 must obey Oregon’s Unlawful Trade Practices Act and all rules adopted pursuant to the UTPA. Effective immediately, Motel 6 must honor all advertised prices, whether advertised by Motel 6 directly or through a third party on behalf of Motel 6.

 

The expectations outlined herein are not unreasonable in the present circumstances, and we hope that Motel 6 will consider an approach that has the potential to benefit all concerned. Please contact me via email at Ariel.J.Dreher@doj.state.or.us by June 30, 2017 and inform me whether Motel 6 will commit to the expectations set out in this letter. Failure to agree to these terms informally may result in further enforcement actions.

 

Sincerely,

Ariel J. Dreher

Assistant Attorney General

Financial Fraud/Consumer Protection Section

 

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