As online booking has grown in popularity, so have scams that enable fraudsters to monetize stolen credit cards. How do these travel industry scams work and just what should you be on the lookout for when booking your next big trip? Let’s take a closer look.

‘Man-in-the-middle’ fraud

Many people still believe– and take a lot of convincing otherwise – that if they have booked through an online site, their booking is legitimate.

However, just because a website exists doesn’t mean there is a real operating company behind it. Anyone can set up a website for as little as a few dollars per month. With so many website templates available, it can be done in as little as a few hours with little to no web design skills. So why do so many people buy into the offers available on random websites? Simply because the offers are too good to pass up, so buyers convince themselves that because the company has a website, it must be legitimate. Often times, it isn’t.

The scam is simple. The “travel agent” in this case is just a scammer who set up a website to make large sums of money on air tickets that don’t exist. The ticket prices are unbelievably low and there is often a reason made up to try to legitimize this – a large group cancelled at the last minute, the agent bought seats in bulk from the airline, etc. – these are stories that sound mildly convincing to the average person who has no knowledge of how airline pricing is actually managed. It’s important to remember that air ticket prices are mostly set by airlines. Although travel agents can offer slight discounts in some cases if the price you’re being quoted is significantly less than what the airline or a high street agent are offering  there is a good chance you’re about to be scammed.

As part of the scam, the “agent” will insist on payment by bank transfer or a money transfer service. The “agent” then uses fraudulently obtained credit card details (either from stolen credit cards, or cards compromised from various sources) to pay for the ticket on the airline or a legitimate travel agency website. A confirmation and e-ticket receipt is then sent to the customer. The customer is able to view their booking on the airlines website and therefore thinks that the ticket is booked and secured. But it isn’t.

It’s important to remember that stolen or compromised credit card details are often processed without a problem if the card has not yet been reported as stolen. Fraudulent purchases are often only picked up at a later stage by the airline or a legitimate travel agency, who then cancel the booking to avoid a loss.

The customer is the one who loses out. Often the customer only realizes that they have been the victim of this scam when they arrive at the airport to find their ticket cancelled. As payment has been made to the fake travel agent by a bank or money transfer, there is no way for the customer to get refunded by chargeback.

Mark Twain once said, “It’s easier to fool people than to convince them that they have been fooled.”I have listened to victims stories over and over again and they rarely differ; these are tales of a price too good to be true and the pressure to pay quickly to secure an amazing deal.

Fake travel website warning signs

At first glance many websites can look like they are legitimate company websites. They display trade association logos (e.g. ABTA, ATOL or IATA) credit card logos, glossy images and even have links to all the legal stuff and disclaimers that websites are supposed to have. But look a little closer and you’ll soon be questioning if this is a place you trust enough to spend your hard-earned cash. Often, it isn’t.

If you were handing cash over to a stranger in the street, wouldn’t you do some simple background checks on them to make sure they are who they say they are? Then why wouldn’t you do the same with a website?

A quick domain name check is a good start. Type the domain name into www.simplywhois.com or use the manual search at  https://www.whoisxmlapi.com/whois-lookup-new and the website registrant’s address will be listed. Another one I like is www.scamadviser.com. Despite the name, this won’t verify that the website is a scam or a fake but will give you some good indicators like the website age and any negative reviews.

One of the fake websites we checked had a .co.uk domain and a British telephone number and so purported to be a UK based company. However, a few checks on the web address showed that the website was hosted in the US and the UK address it was registered to was actually a vacant, boarded-up property. A Whois search will also tell you the age of the website and since many criminals posing as online travel agents set up websites purely for financial gain in popular holiday booking seasons, you should exercise caution if a website has only been in operation for a few months.

The next time you see a great deal and are about to hand over your money, take a few minutes to take a closer look at the website. Ask yourself the following:

• Is the price of the tickets considerably cheaper than what I have seen elsewhere?
• Is the only payment option a bank transfer?
• Are the spelling and grammar in the content of the website to a high standard?
• Are the trade association or credit card company logos of a high resolution?
• Have you had a look at some independent company reviews (apart from the glowing ones on the company’s own website)?

Travel deposit scam

With margins and competition so tight in the travel industry, some legitimate travel agencies will try to maximise profits by luring customers in with a great deal. Blinded by the discounted prices and pressured by the limited availability it is almost too easy to hand over a small deposit to secure an amazing deal. There is a catch, though, and it’s a catch that brings back the old cliché, “always read the fine print”.

The scam is simple. The discounted price that was offered never existed, or never existed for the peak season-high fare travel period that you wanted to book. Once you receive the invoice for the deposit you will notice that it states something like this: “Prices are subject to change unless the full fare is paid and the tickets are issued.” Alternatively,  “All fares are subject to change without prior notification. Full payment will secure the fares, partial deposit is non-refundable and does not guarantee final price”. As you would expect for a scam, bank transfers are insisted upon rather than paying by credit card to prevent client chargebacks.

To avoid this type of scam, you should ask yourself, “What’s the point of paying a deposit if it doesn’t secure your seat or guarantee the fare price?”That is exactly what this scam is about. When the time comes to pay the residual balance, you will then be quoted the full, higher price in order to secure your booking. The travel agent will tell you that the prices have gone up because it is much closer to the flight departure date. The travel agent will be covered by the terms and conditions that you agreed to when you paid the deposit.

At this stage, it’s unlikely that most customers will agree to lose the deposit that they have paid (which could amount to as much as $500 for a family of four). The customer would still have to fork out for high fare tickets by using another travel agency because by this time all the cheaper tickets will probably have sold out. Imagine if the customer has also made holiday arrangements and most likely paid for accommodation and car rental. They have no option but to accept the price increase for fear of losing their entire vacation.

But you can minimise your risk by following the guidelines here:

• If you decide to use a third-party travel site, choose a well-known and reputable brand.
• Does the discounted price quoted actually exist? You can always call the hotel or air carrier directly to confirm the price quoted before you make a deposit. If there is no record of your reservation, it’s better to know sooner rather than later and still have time to secure a real booking.
• Read the fine print and ask the agent any questions if you’re not certain. It is preferable to do this in writing.

When in doubt

With the rise of internet bookings, almost anyone these days can claim to be a travel agent. The profession has changed dramatically and it continues to evolve to meet the needs of the travelling public. Good travel agents have a deep understanding of the airline industry, how it operates and most importantly, they are accredited.

Whilst it is perfectly normal to shop around for the best deal, you should remain vigilant to how these common scams operate. Make your bookings through a trusted high street brand or an established and reputable travel agent. Remember to read the fine print and avoid pressure to pay quickly without the added protection of a credit card. When in doubt, trust your instincts or risk turning your dream holiday into a nightmare.