By Ryan L. Kaiser, CFE, Assistant Fraud Risk Manager, Canandaigua National Bank & Trust
Planning your next vacation? Be on the lookout for potential fraud!
According to the FTC, consumers in the United States have lost nearly $75M in vacation-related scams since the COVID-19 pandemic began. Vacation and travel scams are the second most reported scam to the FTC, with over 40,000 fraud reports since the beginning of 2020. Here are a few of the most popular schemes related to travel that fraudsters employ, and some best practices to keep in mind when you plan your next trip!
Scammers target vacationers with promises of abnormally low pricing or lavish amenities, often using properties that are not truly for rent, do not exist, or are significantly different than advertisements or photos. The "owner” will often create a false sense of urgency – such as telling potential clients that another traveler has expressed interest in the rental – to secure payment as quickly as possible before any due diligence can be completed by the traveler.
Some tips to consider -
- Speak with the owner by phone before booking. If you are not using a service that verifies properties and owners, never negotiate a rental solely by email. By speaking with the owner on the phone, asking specific questions about the property, and requesting information on rental options or local attractions, it will be easier to tell if the listing is legitimate. An owner who doesn’t want to speak on the phone or provides vague answers to questions should raise red flags.
- Consult online reviews – be wary of a brand-new rental which no one has vouched for or submitted a review for.
When staying in a hotel, be aware of techniques fraudsters use to solicit credit card information. Scammers count on travelers to let their guard down when they’re tired or in a hurry. Common fraud tactics include phony front desk calls to solicit credit card info, “free” unsecured Wi-Fi connections where personal information can be stolen, and solicitations from fake merchants such as restaurants or service providers. Stealing credit card information is the most common goal of these schemes.
When a cruise or travel company advertises a vacation as “free,” it does not necessarily mean the trip is entirely without cost, fees, or restrictions. Or even worse, upon arrival at the destination it may be obvious that the “free” vacation package is a total scam and completely fabricated.
Thoroughly review the fine print for any offer for add-on fees for air transportation, resort fees, port charges, taxes, tips, and other undisclosed fees. Conduct thorough research to see if other consumers have reported fraud for similar vacation packages. Be extremely suspicious of any unsolicited offer that states you “won,” but you did not apply or sign up for!
If you book your airfare or hotel through a third-party website, be sure to use caution. Some websites may appear to offer a legitimate service but are only fronts for a scam. Be skeptical of websites with no working customer service phone number or physical address. In the most common version of this scam, travelers pre-pay with a credit card and shortly after making payment, receive a call from the company asking to verify name, address, banking information or other personal information – something a real company would never ask.
Another common travel scam is the timeshare resale scheme. A timeshare owner who is looking to sell receives an unsolicited call from a broker or agent, promising a significant return on their sale. These scammers claim to specialize in timeshare resales and promise they have multiple buyers ready to purchase immediately. To secure the service of the “agent,” the scammer pressures the owner into paying an upfront service fee. The timeshare owner remits payment, and the “agent” walks away, pocketing the fee.
- Due diligence: Look for reviews, photos, and ask for references before booking when appropriate. Research potential questionable vendors online thoroughly. Check social media, Google, and the BBB for negative reviews or complaints.
- Payment methods: Don’t wire funds or make payments with a prepaid debit card. If using a known trusted vendor such as AirBnb, do not be convinced to send payment outside of the app, via payment methods such as Paypal, Venmo, or CashApp.
- Trust your gut: If a deal sounds outstanding or “too good to be true” – it probably is! When in doubt, trust your instincts and find a different option or accommodation that feels more secure.