Planning a summer vacation? Well, the FTC says that you shouldn’t relax just yet. Scammers could be working to get their hands on your hard-earned travel money, and technology may be making it even easier for them.
Online Travel Bookings Can Be Great for Consumers—and Scammers
Technology is transforming the way people book travel, but it can also create problems in terms of travel fraud.
The rise of online travel bookings has created unprecedented convenience and opportunity for travelers, who can now purchase last-minute or discounted deals at the click of a button. But it has also created a platform for thieves and con artists.
To make matters worse, the travel industry is often considered an easy target for fraudsters. Since bookings are intangible, they don’t need to be delivered or picked up like a product, and they are short-lived. Travel reservations are sometimes made so last-minute that companies have to race the clock in order to detect and block a bad purchase before the travel occurs.
Travel Fraud Is on the Rise
One in four consumers has been scammed, according to a report by the American Hotel and Lodging Association (AHLA).
Some third-party travel resellers use a variety of misleading marketing tactics to realistically mimic hotel websites and call centers, but they often aren’t actually affiliated with the hotel. This has reportedly led to 28.5 million fraudulent and misleading hotel bookings, costing consumers an estimated $5.2 billion in 2017.
Travelers who reported being misled by these tactics experienced:
- Extra fees charged on their credit card
- Lost reservations, resulting in losing the cost of the original reservation and having to book new accommodations
- Special room requests that were made but not communicated to the hotel
“Free” Vacations Often Aren’t Free
The FTC warns consumers against one scam in which fraudsters contact victims by phone, text, mail, or ads promising free or low-cost vacations. “Free” vacation offers may have lots of strings attached or may be completely fake—or anywhere in between.
Most likely, says the FTC, someone who offers you a free or incredibly low-cost vacation probably wants something from you—whether it is paying undisclosed taxes and fees, attending a mandatory timeshare presentation, or being subjected to high-pressure sales tactics to purchase add-ons for the trip.
If someone offers you a free vacation but says you need to pay? You may want to walk away.
Tips to Better Protect Your Vacation from Travel Fraud
There are several ways to better detect and avoid travel fraud, but it’s wise to be wary long before your vacation begins. Here are a few tips that can help keep your vacation sunny:
- Book Travel through a Reputable Source – One of the keys to planning a great vacation is to book your travel through trusted organizations and websites. One approach is to seek referrals from family and friends. If you can’t get a direct referral, the FTC advises that before you do business with a company you don’t know, you should contact the Attorney General and local consumer protection agencies in the company’s home state to research any past complaints. Then search online by entering the company name and the word “complaints” or “scam” into a web browser.
- Be Skeptical of “Free” Offers – If a company advertises a free or incredibly cheap trip, beware of hidden costs that may be an unwelcome budget buster later on. For example, to take advantage of a free cruise, you may have to pay for your flight to the departure point at your own expense. Some deeply discounted travel offers may only be valid if you pay full price for your travel companion, and in other cases a free trial membership to a travel club may result in monthly charges on your credit card.
- Get All the Details of Promised Amenities – Some companies advertise below-average vacation accommodations as “luxury” or “five-star,” so make sure you get all the details about any promised amenities—including what other travelers have said. The more vague the promises, the less likely they are to be true, so if the company can’t or won’t give you specifics, it’s likely a red flag. It may be a good idea to go the extra mile and research the resort’s address and search for photos of the resort or cruise ship.
- Be Aware of Fees and Restrictions. Sometimes it’s important to read the fine print. Hotels often charge extra per-night fees, called resort fees, for services like internet access or the hotel gym, and those fees may be mandatory even if you don’t use the service. Make sure you are comparing apples to apples on hotels by researching the total cost per night, including fees. If it’s not clear from the website, you can call the hotel and ask about their resort fees and any other mandatory charges.
- Get a Copy of Cancellation and Refund Policies – Know your options in case you have to reschedule or cancel your vacation. Some third-party websites don’t openly display the cancellation policy and don’t provide refunds or allow you to modify your trip after you book. The FTC advises consumers to consider purchasing travel cancellation insurance. For a list of licensed travel insurance companies, visit the US Travel Insurance Association.
- Look Before You Book – The American Hotel & Lodging Association (AHLA) advises consumers to “look before you book.” This means taking an extra few minutes to make sure you’re booking through a hotel’s legitimate booking site and not a third-party reseller. Some third-party resellers may even use the hotel’s name in the URL, so if you are in doubt, the AHLA recommends booking directly with the hotel or through a trusted travel agent.
- Check the Security of the Website – Booking on a secure website provides an added layer of protection for your credit card. Check that the URL has a lock icon within the search bar and that it begins with https:// (not just http://). If the website doesn’t have those two security indicators, it could also be a red flag that the company isn’t legitimate.
- Pay by Credit Card – Paying by credit card can give you more protection than paying by cash or check because if you ultimately don’t get what you paid for, you may be able to dispute the charges with your credit card company. However, per above, don’t give your credit card information to any business until you’ve first verified its reputation.
- Confirm the Reservations Yourself – If you purchase a travel package—for example, one that includes transportation and hotel—ask the travel company for the contact information of those individual companies. Once you have the names, addresses, and phone numbers of the airline, car rental company, and hotel you or the travel company will be booking, call to confirm the reservations and details yourself.
If you think you may have been targeted by a travel scam, report it to the FTC at ftc.gov/complaint.