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The encyclopedia · Advertising & PR · Marketing decision · 2021

FlightHub hid seat fees, wrote its own reviews and raised prices mid-search — $5.8M

Feb 2021: FlightHub paid $5M and two directors $400K each — hidden seat fees, self-written reviews, and prices that rose after you picked a flight.

FlightHub Group Inc. · 2021-02

What happened

FlightHub, a Montreal online travel agency, made millions by actively concealing seat-selection fees: the seat map gave the impression that picking a seat secured it, and often it did not. Prices rose after a consumer selected a flight. Cancellation and rebooking rights were implied to be free when fees applied, and travel credits pitched as usable on any future flight carried restrictions — and sometimes shrank in value after being agreed.

The Bureau also concluded FlightHub wrote positive customer reviews itself, or had them written on its behalf, and presented them as genuine feedback. On 24 February 2021 the consent agreement landed: a $5 million penalty for the company — the largest the Bureau had imposed in a drip-pricing case — plus $400,000 each for directors Matthew Keezer and Nicholas Hart, $5.8 million in all, binding for ten years.

The settlement was shaped by FlightHub's insolvency: Quebec's Superior Court had granted it creditor protection in May 2020, and the penalties rank as unsecured claims. The Bureau pursued the directors personally anyway. Commissioner Matthew Boswell called cracking down on deceptive marketing in the online marketplace a top priority — the case was the proof.

Why it happened

  • The seat map promised a reservation it did not make: the interface itself was the misleading claim.
  • Self-written reviews dressed as customer feedback bought trust the product had not earned.
  • Directors paid $800,000 personally: corporate structure did not shield the people who decided.
What it cost$5M penalty; two directors $400K eachcostly

The lesson

When the funnel deceives — hidden fees, prices that climb, reviews the seller wrote — the penalty can reach past the company to the directors. Insolvency delays it; it does not cancel it.

Aftermath

The company, in creditor protection, had the penalties treated as unsecured claims; the ten-year binding terms required removing the fake reviews and barring misleading claims on prices, cancellations, rebooking and seat selection.

Sources

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