Fareportal Travel Settlements: NY Tax, Dark Patterns, DOT Penalty

Fareportal, Inc., the parent company of the online travel booking sites CheapOair and OneTravel, has faced three government enforcement actions over the past decade, and the settlements from Fareportal cases now total roughly $7.3 million. The most recent, announced in May 2026, was a $4.5 million agreement with the New York Attorney General over a tax avoidance scheme. It followed a $2.6 million New York settlement in 2022 over deceptive online marketing, and a $185,000 federal penalty in 2015 over misleading flight advertisements. A separate class action involving Travel Guard travel insurance sometimes appears in the same search results, but it is not a Fareportal case.

The 2026 New York Tax Settlement

On May 22, 2026, New York Attorney General Letitia James announced a $4.5 million settlement with Fareportal and three affiliates — WK Travel, Inc., Jen NY, Inc., and Tripmama, Inc. — for violating the New York False Claims Act.¹ The state alleged that between 2007 and 2012, the companies routed roughly $145 million in taxable dividends through a shell entity called Magic Travel, LLC, labeling the payments as “management fees” to reduce their taxable income and dodge more than $1 million in New York state corporate taxes.

Magic Travel held the personal investments of the travel companies’ owner, who also served as CEO of Fareportal. According to the Attorney General’s office, outside accountants had warned the companies that the payments could be classified as taxable dividends, meaning the misclassification was deliberate rather than an innocent bookkeeping error.¹

The case originated as a whistleblower action under the state’s False Claims Act. The whistleblower is set to receive about $1 million of the $4.5 million recovery, with the rest going to the state.¹

The 2022 Dark Patterns Settlement

Four years earlier, on March 16, 2022, Attorney General James secured $2.6 million from Fareportal over a different set of violations. This time the focus was on deceptive online marketing tactics the office called “dark patterns.”² The investigation found that since at least 2017, CheapOair.com and OneTravel.com had used a range of manipulative design tricks to pressure consumers into booking flights and hotel rooms.

The tactics were more elaborate than simple puffery. When a user searched for a single airline ticket, the site displayed a warning like “Only 2 tickets left.” If that same user searched for two tickets, the number changed to three. The scarcity messages were keyed to the search query, not to actual inventory. A feature showing how many people were “currently viewing” a listing used a random number generator that produced a figure between 28 and 45, regardless of whether anyone else was actually looking.³

Other practices the investigation identified:

Computer-generated numbers displayed to show how many users had supposedly purchased travel insurance or upgraded their seats.
Messages telling users that 71–80% of hotel rooms in an area were already booked, with the percentages driven by how far in advance the user was booking rather than actual availability.²
Slashed-through “original” prices that tickets had never actually been offered at.
Inaccurate statements about service fees added to ticket prices and about the company’s 24-hour cancellation policy.
Countdown timers designed to rush purchase decisions.

The $2.6 million payment covered disgorgement and costs. Under the agreement, formally an Assurance of Discontinuance, Fareportal was required to display accurate, real-time data for all availability and popularity claims, use only legitimate comparison prices, and provide clear disclosures about fees and cancellation rights.² Fareportal made no admission of wrongdoing.³

The 2015 DOT Penalty

Fareportal’s regulatory history runs further back. On March 13, 2015, the U.S. Department of Transportation’s Office of Aviation Consumer Protection issued an enforcement order against Fareportal, doing business as CheapOair, for violating the federal prohibition on unfair and deceptive practices in air travel.⁴

The violations involved CheapOair’s “fare matrix,” a comparison tool that displayed flight options side by side. DOT investigators found two problems. The matrix falsely indicated that the same airline operated both the outbound and return legs of a trip when different carriers were actually involved, and it labeled flights as “nonstop” when they actually included multiple stops.⁵

The DOT assessed a $185,000 civil penalty, with $92,500 due within 30 days and the remaining $92,500 conditionally suspended for one year, payable immediately if the company violated the cease-and-desist order or missed the first payment. Fareportal did not admit to the violations but stated it had made “significant changes to its search features” to address the concerns.⁵

The Travel Guard Case Is Not a Fareportal Settlement

A separate class action, Miller et al. v. Travel Guard Group, Inc. et al. (Case No. 21-cv-09751-TLT, N.D. Cal.), sometimes appears in searches for travel settlements. It has nothing to do with Fareportal. The defendants are Travel Guard Group, Inc. and three AIG-affiliated companies, and the claims involve an undisclosed “Assistance Fee” added to Travel Guard insurance plans sold through channels such as Expedia and United Airlines.⁶

The class period runs from December 17, 2017, through January 18, 2024, and the defendants agreed to pay $23,997,500 into a common fund without admitting liability.⁶ U.S. District Judge Trina L. Thompson granted final approval on December 9, 2024, but the settlement remains ineffective and no payments have been distributed because an objector filed an appeal.⁷ The claim deadline was August 13, 2024.⁸ If you bought a Travel Guard plan in the class period, that case may apply to you; if you booked a flight through CheapOair or OneTravel, it does not.

1
NY Attorney General. Attorney General James Secures $4.5 Million From Travel Agencies’ Scheme to Avoid Taxes
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NY Attorney General. Attorney General James Secures $2.6 Million From Online Travel Agency for Deceptive Marketing
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Forbes. New York AG Slaps Online Travel Agency With $2.6M Fine for Deception
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U.S. Department of Transportation. Enforcement Order 2015-3-5
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U.S. Department of Transportation. DOT Enforcement Order 2015-3-5
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CaseMine. Miller v. Travel Guard Grp., Inc., Case No. 21-cv-09751-TLT
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TravelFeeSettlement.com. Travel Guard Settlement
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TravelFeeSettlement.com. FAQs