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Beware hotel extortion scams in India

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I had booked two rooms in Hotel Bansi in Dwarka, Gujarat for two nights in January 2016. The booking was done online on December 24th through Arun Singh of indiahotelsroom.com who collected the full payment in advance into their ICICI Bank account before confirming the booking in my name.
Check-in was without any issues after providing my USA passport as ID. On the second night I was told by the lobby manager that indiahotelsroom.com had paid them only half of the charges and had asked them to collect the rest from me in person. We held our ground that we had made full payment to them and had proof of a successful online transaction with details showing Hotel Bansi as the Merchant Reference. Calls to indiahotelsroom.com to sort out the matter were not answered. The next morning Hotel Bansi owner threatened not to let us checkout unless we paid up. He threatened to file a FIR report with the police if we attempted to do so. We ignored his threats and left since we had definite proof of having paid the full charges. It was certainly an empty threat since did not hear from them or the police thereafter.
My attempts to contact Arun Singh of indiahotels.com after returning to Mumbai were unsuccessfull. The person who answered the phone, named Neha, affirmed that they had made full payments to Hotel Bansi. But she did not comply with my request for the transaction details of the payment nor with the request to talk with Arun Singh. This leads me to strongly suspect that indiahotelsroom.com is a partner in crime with Hotel Bansi and might be attempting such scams with other hotels at popular pilgrimage destinations in India. Most Non Resident Indian tourists might cringe at the FIR threat and succumb to the extortion. Such scams are sure to give a new dimension to the adjective in "Incredible India" slogan used by the Indian government to promote tourism in India.
I hope my posting will serve as a caution against using online hotel booking agencies in India of unknown reputation and to carry ample proof of all advance payments even when dealing with better known agencies. Perhaps it is best to book directly with the hotel and avoid agencies altogether, although smaller budget hotels in temple towns in India might not offer online booking facility.

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