FlightHub ordered to pay $5.8M in penalties for deceiving customers

The Competition Bureau's investigation into FlightHub, launched in November 2018, has resulted in penalties totalling $5.8 million for the online travel agency, it was announced on Feb. 24. 

In February 2019, the Bureau executed search warrants and seized documents at the company's head office in Montreal. 

In May 2020, FlightHub was granted protection against its creditors by the Superior Court of Quebec .

In addition to the penalty for FlightHub Group (operator of FlightHub.com and JustFly.com), two company directors (Matthew Keezer and Nicholas Hart) accepted a penalty of $400,000 each.

The Bureau determined that the online travel agency charged consumers hidden fees, wrote positive consumer reviews to promote its services, and made numerous false or misleading representations about its prices and other services. 

False or misleading information

The sanctions are part of a settlement today with the Competition Tribunal, prohibiting FlightHub and directors Matthew Keezer and Nicholas Hart from giving any further false or misleading claims.

The items in question included the price of plane tickets, as well as the costs and procedures associated with cancelling a flight, changing a reservation and selecting seats.

FlightHub must also remove any online reviews of its services that have been posted by the company, or on its behalf, that make it appear as if they are from actual customers.

As part of its investigation into FlightHub's business practices, the Bureau reviewed thousands of consumer complaints, seized documents at the company's head office in Montreal, and obtained temporary consent to protect the public while the investigation was ongoing.

Hidden charges

The Bureau found that FlightHub generated millions of dollars in revenue through hidden charges and deceived consumers on FlightHub.com and JustFly.com about the costs and terms associated with a variety of services, including:

• The terms and fees associated with seat selection
  • FlightHub actively hid a fee it charged consumers when selecting seats.
  • FlightHub made it appear that consumers could reserve their seats by selecting them on a seat map, but the company did not reserve the chosen seats for many consumers.
• The price of plane tickets
  • FlightHub promoted false or misleading pricing information on its websites and emails, and occasionally increased prices after consumers had selected airline tickets.
• The terms and fees associated with canceling a flight and changing a reservation
  • FlightHub made it seem like consumers could get a flight cancelled and a reservation changed at no cost, when consumers actually had to pay an additional fee.
  • FlightHub gave the impression that consumers had greater rights to cancel a flight and change a reservation than they actually did.
• Obtaining and using "travel credits" for future bookings
  • FlightHub gave the impression that consumers could cancel a flight in exchange for credits to be used for any other future bookings, when in fact “travel credit” could be subject to significant restrictions and additional costs.
  • In some cases, after consumers agreed to cancel a flight in exchange for a travel credit of a specific value, the value subsequently declined.

FlightHub in insolvency

As part of today's settlement, the Bureau has taken into account that FlightHub is in insolvency and has been granted protection against its creditors.

The penalties involved will be treated as unsecured claims in any plan of arrangement filed by FlightHub under the Companies' Creditors Arrangement Act (CCAA).

All other provisions of the regulations are binding on FlightHub and the two directors for a period of 10 years, regardless of the outcome of proceedings initiated under the CCAA.

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