Montreal-based online travel agency FlightHub Group Inc. has reached a $5-million settlement with the Competition Bureau of Canada after it was investigated for misleading marketing practices. Two of its directors must also pay additional fines of $400,000 each as part of the settlement.
FlightHub collected millions of dollars from its customers by charging hidden fees and misleading them about the costs and terms associated with their services, said the Competition Bureau.
“We have pursued this case relentlessly to ensure that Canadians would be protected against any further deceptive marketing by FlightHub and its directors,” said commissioner of competition Matthew Boswell Wednesday.
The company runs two websites where consumers can book flights and hotels. According to a Canadian Press report, the Competition Bureau said that FlightHub allegedly raised prices after a customer selected a flight and also hid fees they charged for seat selection.
The commission also reported that FlightHub misled clients about their cancellation and rebooking policies, adding that it received thousands of complaints from the public.
FlightHub Chief Executive Officer Christopher Cave said the company disagrees with the Competition Bureau’s assessment, but added that it has since resolved their concerns about its practices.
On top of the $5-million fine, company directors Matthew Keezer and Nicholas Hart, will each pay additional penalties of $400,000.
The Competition Bureau began its investigation into the company in 2018.
The Competition Bureau said while working on the amount of the settlement it took into account the fact that FlightHub was granted creditor protection by the Quebec Superior Court in May 2020.
“Finalizing this agreement with the Canadian Competition Bureau was the last major issue to resolve prior to emergence from our ongoing restructuring process,” Cave said in a statement.
“Failure to reach an agreement would have likely resulted in asset liquidation and ceasing of operations. It was imperative for the company and its directors to avoid this scenario at all costs.”
The company also operates Agencia Global, its air consolidator arm, that sells net fares to travel agents in Canada and the U.S.