·  Legal News, Analysis, & Commentary

Lawsuits & Litigation

Class Action Accuses Expedia of Racketeering and Fraud

— December 30, 2018

Attorneys filed a class action suit against travel booking juggernaut Expedia last week, alleging that the company overcharges customers on taxes and fees.

Seattle Pi reports that Expedia is accused of ‘levying taxes beyond what’s required by local jurisdictions for hotel rooms and pocketing the proceeds.’

This isn’t the first time the website’s run afoul of the law. According to, Expedia settled a similar consumer suit in 2009 for $123.4 million. That suit alleged a widespread breach of contract, coupled with deceptive business practices.

Travel portals have long been criticized for inadequately explaining the basis of tax charges and supposedly mandatory fees.

The same Seattle law firm that sued Expedia in 2009 is spearheading the latest class action. Along with tax fraud, Hagens Berman says the company has violated the Racketeering and Corrupt Organizations statute—a federal law originally designed to take down members of the American Mafia, but which has seen novel utilization since.

The suit focuses on charges levied through, which obtains its hotel room inventory from Expedia., says Seattle PI, has brokered over 4 million ‘room nights’ since opening in April of 2014. Expedia collects the site’s payments for lodging, taxes and fees, on top of a $14.99 commission from

After consumers follow through with a reservation and check out of a hotel, Expedia is supposed to remit collected taxes and fees to hotels or local government agencies. But attorneys say that Expedia routinely took more than needed, charging above cities’ rates and pocketing the difference.

Seattle Pi recounts the experience of plaintiff Joseph Church, who spent two nights at the Hyatt Regency Orlando.

Court documents claim that Expedia overcharged consumers nearly $100 million through Image via Pictures of Money/Flickr.

Church made his booking through, paying $518.30 for the room, $14.99 for a service fee and $108.68 for taxes and fees.

However, Orlando’s tax for hotel rooms is 13.5%. While Church should have been liable for just under $70 in taxes, he was overcharged by nearly 50%.

Other instances outlined by attorneys indicated that the practice of taking more in taxes was routine on In some listings, such as that for the Renaissance Seattle Hotel, Expedia levied more than twice the usual rate.

While isn’t named as a defendant, the lawsuit maintains that the Expedia affiliate was a knowing and willing accessory to deception.

“Contrary to’s representations and/or the expectations of consumers, the ‘taxes and fees’ charged by the defendants are not the actual taxes and fees remitted to governmental authorities but contain additional amounts surreptitiously added by the defendants,” claims the suit.

Notices on  say that whatever taxes and fees are collected in prepaid hotel bookings are due only to government mandate. notes that, while the suit only now focuses on Expedia’s practices ‘in relation to,’ the litigation wishes to retain the right to expand its scope. Attorneys claim the purported deception has cost customers nearly $100 million.


Class-action lawsuit: Bellevue-based Expedia overcharges customers on taxes

Expedia Faces Traveler Fee Lawsuit Alleging Tax Fraud and Racketeering

Join the conversation!