When booking travel online, it’s not just holidaymakers who fall victim to scams—travel businesses and sellers are increasingly targeted too. Anyone selling travel packages, accommodations, or related services online must understand how to spot and avoid fraud while knowing what to do if they fall victim.
With online payment fraud on the rise, travel businesses are especially vulnerable to scams that can damage both finances and reputation. In fact, according to Business Wire, US businesses saw a 71% increase in payment fraud attempts in 2023. For travel businesses, staying vigilant against such threats is crucial.
Dennis Pederson, CEO of PayFasto, has highlighted five common payment scams that travel sellers should be aware of and how they can respond if targeted.
Phishing Scams
Phishing scams are a growing threat in the travel industry. Criminals often send emails or texts posing as reputable airlines, hotels, or booking sites, tricking staff or customers into sharing sensitive information like credit card details or login credentials. These scams often mimic genuine companies with fake websites that look authentic.
Travel businesses must be extra cautious, as falling for these scams not only compromises their own data but also risks damaging their relationship with customers. To guard against phishing, train staff to recognise warning signs, such as unexpected requests for information, poor grammar, and suspicious sender addresses. Implementing email filters, using multi-factor authentication, and keeping software up to date can also help prevent these attacks.
Chargeback Fraud
Chargeback fraud, or friendly fraud, is another common issue for travel sellers. Customers may book a flight, holiday, or hotel stay, only to later dispute the charge with their bank after using the service, claiming they never made the booking. This can lead to significant financial losses for the business.
To prevent chargeback fraud, travel companies should ensure all transaction details, including the company name and payment description, are clear to avoid confusion. Sending prompt booking confirmations and keeping thorough records of transactions and customer interactions will also help resolve disputes efficiently.
Return Fraud
Return fraud, while more common in retail, can also affect travel sellers, especially those dealing with physical goods like equipment rentals or travel accessories. Customers may claim an item was defective or return a different product to exploit a business’s returns policy.
To reduce this risk, travel businesses should establish clear return policies and enforce strict checks when processing returns. Any returned goods should be inspected to ensure they meet the original condition requirements.
Merchant Fraud
Merchant fraud is a serious concern in the travel industry. Fraudsters may set up fake travel agencies, websites, or accommodation listings, tricking customers into booking non-existent holidays or stays. While this directly targets consumers, legitimate travel businesses can suffer reputational damage by association.
To avoid falling into this trap, travel sellers should ensure their branding, logos, and transaction details are clearly displayed, so customers can distinguish between real and fraudulent services. Adopting secure payment methods and multi-factor authentication can further protect customers and businesses alike.
Wire Transfer Fraud
Wire transfer fraud is another scam that frequently affects travel businesses. Fraudsters often impersonate suppliers or senior staff, sending fake invoices or urgent requests for payments. These scams are often designed to seem highly realistic, prompting rushed decisions.
Travel businesses should always verify any payment requests, especially if unexpected. Make sure that multiple people are involved in approving significant financial transactions. Improving cybersecurity protocols, such as using strong passwords and limiting access to sensitive data, can further reduce the risk.
In the fast-paced world of travel, sellers must remain vigilant. With rising threats, it’s crucial for travel businesses to educate staff, stay informed about the latest scams, and implement robust security measures to protect their operations from fraud.
More information here: https://payfasto.com/high-risk-merchant-account/
