Directors Fined Personally in FlightHub DRIP Pricing Settlement

Fly Away Hidden Fees

In our Competition Law Year In Review 2019, we reported on Canada’s Competition Bureau’s interim consent agreement with FlightHub prohibiting it from using misleading marketing practices on its websites.

On February 24, 2021, FlightHub and the Bureau settled the Bureau’s allegations that the operator of FlightHub.com and JustFly.com misled consumers about prices and services, made millions in revenue from hidden fees, and posted false online reviews.

The Bureau has been prosecuting claims of alleged drip pricing for a number of years (see some of our posts here). Drip pricing includes the practice of advertising low prices to attract consumers while burying mandatory fees in the terms and conditions. This practice can be misleading to consumers and contrary to the Competition Act.

FlightHub Group Inc. agreed to pay a $5 million fine. Interesting from this settlement are fines of $400,000 each against two company directors personally. The company is now insolvent, so the $5 million fine will be treated in accordance with the Companies’ Creditors Arrangement Act. The company and the two directors have been prohibited from making any further false or misleading claims for a period of 10 years.

Some of FlightHub’s offending practices included:

• Actively concealing fees that it charged consumers for seat selection
• Not being able to secure seats selected and paid for by many consumers
• Increasing prices after consumers selected a flight
• Consumers being charged additional fees to change or cancel flights despite being given the opposite impression
• In some cases, after a consumer agreed to cancel a flight in return for a travel credit of a specific value, the value later decreased