By James Limbach

November 13, 2009
A U.S. Department of Transportation administrative law judge (ALJ) has okayed a set of stiff fines levied against the Internet travel agency Ultimate Fares and its owner for violations of advertising regulations.

ALJ Richard C. Goodwin has fined the company $600,000 and its owner, owner Roni Herskovitz, $30,000. The order also bars Herskovitz from any involvement in the online air travel agency business for 12 months.

An investigation by DOT's Aviation Enforcement Office found that Ultimate Fares failed to include the federal excise tax and the service fee it charged to consumers in fares published on its website between March 2008 and September 2009. This violated the Department's requirement that published airfares must state the full price to be paid including service fees and any ad valorem tax, such as the Federal excise tax, which is assessed as a percentage of the fare.

Ultimate Fares continued to omit the tax from its stated fares even after the enforcement office began its investigation, and also failed to disclose which flights were being operated on a code-share basis as required by the Department's rules.

Ultimate Fares has been the subject of numerous consumer complaints:

• Sandeep A. from Nesconset, N.Y., tells, "After giving my credit card number and no confirmation from the company after 48 hours regarding my flight, the company has put me on phone hold in excess of 30 minutes on three occasions and no response even after getting in touch with the operators. They can't tell me even if the tickets are going to be ready for the international travel."

• Darlene K. of Brick, N.J., writes ConsumerAffairs.Com that after receiving confirmation of her booking of a flight to Reno, she and her husband arrived at the airport to find they had no reservations. "As a result, I needed to purchase new airline tickets at a cost of $1427. I also had to cancel my time-share reservation at an additional cost of $189. We also needed to purchase our hotel accommodations at a cost of $621.22. Due to Ultimate Fares' negligence, we encountered monetary hardship, unnecessary stress and an enormous amount of time trying to resolve this problem to no avail."

• Dror Z. of Toronto writes, "I booked a flight from NYC to Mumbai, India through, which is the website for Ultimate Fares Inc. I paid with my debit card. By the day of traveling, the money was not collected from my account and when I arrived to the airport, the ticket was cancelled. In the days before the flight, I sent a few e-mails to the customer support department, but all I got back was an automatic response that the message was received but no action was taken. A month later I found out that the money was taken, since I needed it and it wasn't there. I've contacted them over the phone and via e-mail but the money was not returned to me. About two months ago I have contacted Ultimate Fares Inc. again, demanding my money back. Again I was moved from one agent to the other and at the end, no action was taken. I was forced to borrow $600 from various people. I needed a medical treatment, and couldn't get it because I didn't have money to pay for it."

The fine -- the largest ever assessed for advertising violations -- will become final in 30 days unless the Department decides to review the action or a petition for review is filed.