A nonprofit group in Saitama Prefecture filed a cease and desist lawsuit against online travel agency Agoda on Wednesday, saying the firm’s terms of service that limit it from being liable for compensation violate consumer protection laws.

In filing the lawsuit to the Saitama District Court, the Saitama Organization To Get Rid of Consumer Damage claimed that Agoda's terms of service include unfair clauses violating Consumer Contract Law. These clauses absolve the Singapore-based travel agency of legal obligations, particularly regarding damages claims for its hotel reservation website. The consumer advocacy group contends that the lack of clarity about the company’s liability hurts users' interests.

The group pointed out that even if the firm were to assume responsibility, it would only be liable for up to $250. If the travel service cost less than that, the company would only pay that amount due to its clauses.

While the group asked Agoda to refrain from using such clauses via email, they received a response refusing their request. This prompted the nonprofit to file a lawsuit.

The lawsuit seeks an injunction against the travel agency and its Japanese agent, Agoda International Japan, with the aim of preventing them from making statements containing the contested clauses and to halt the online publication of terms of use that contain such provisions.

The lawsuit also cites inadequate handling of reservation cancellations and denied refunds. Some individuals complained that they were unable to stay at their reserved hotels upon arrival and were directed to different ones. Similar grievances have been reported to consumer affairs centers nationwide.

Major online travel agency Booking.com has also received complaints of payment failures in Europe and Asia. Some Japanese hoteliers are reportedly considering filing a class-action lawsuit against the company, alleging that over recent months Booking.com has not promptly transferred customer payments to the hotels, resulting in delayed payment of hotel bills for days or even months.