The American Hotel and Lodging Association welcomed the FTC alert, calling it "a sign of progress" that this problem is being taken seriously.
"This is an issue that needs to be addressed," said Vanessa Sinders, the industry group's head of government affairs.
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The association estimates that 2.5 million bookings are done via "rogue, third-party businesses" each year, costing consumers an estimated $220 million. These bad bookings can disrupt a business trip or ruin a vacation. Imagine having reserved a wheelchair-accessible room and none is available.
"Sometimes people show up and there's no room, sometimes they see extra charges on their credit card, sometimes they book a room with certain amenities and when they show up at the hotel, those amenities or rooms are not available because they booked on a third-party site," Sinders explained.
That can leave management at the hotel, which had nothing to do with the reservation, in a difficult position. They can't return a deposit they didn't get. And they can't give loyalty points for a reservation they didn't book.
Matthew Kent, general manager of the Best Western Ocean Beach Hotel & Suites in Cocoa Beach, Florida, had to deal with this problem last summer, when people who had booked with a third-party site showed up at his hotel.
"Sometimes it was as simple as they thought they were getting a room on the ocean and they weren't. Sometimes it was more complicated, like a family of five is booked in a room with one king bed," Kent said.
This unauthorized site offered rooms at Kent's hotel at a steep discount. It used the Best Western name and logo without permission, copied photos from the real hotel website, used "Best Western" in its URL and answered the phones "Best Western reservations," he said.
"We had people show up looking for specific accommodations that we didn't have for them and there wasn't really much I could do except cram them in and make them as comfortable as possible or try to move them around," Kent told NBC News. "They save for months and months to get to the beach in Florida and then it was a nightmare for them."
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Kent said he tried to explain that they had booked through an unauthorized reseller, but these unhappy guests didn't always believe him.
"It puts me in a horrible situation. It's hard to convince them that they didn't book with us," he said. "And these days, when someone is unhappy, they go on Trip Advisor and tell the whole world."