As if the travel advisor’s job was not already tough enough, they also need to be on high alert for scams that could leave them financially responsible. Scams have become more elaborate lately, and travel agents are routinely victimized.
Here, we’ll look at several types of scams and discuss how to avoid falling into their traps.
Phishing Scams
By now, we all know about phishing emails, but savvy criminals continue to constantly send them in hopes that someone will take the bait. In fact, the International Air Transport Association reports that approximately 90% of all emails sent worldwide are spam, spoof and phishing attempts.
Airlines Reporting Corporation recently warned that phishing emails continue to be sent to the travel agency community, and that these emails contain language to “urge the email recipient to click on an embedded link and input their GDS login credentials. Once the user clicks, the GDS credentials are harvested by a fraudster who will gain remote access to the GDS to issue tickets.”
The fraudulent issuance of airline tickets usually occurs over a weekend, with cash as the form of payment and for immediate travel, often on the African continent. And the money lost as a result of this fraud is staggering: Payment fraud costs the air transport industry an estimated $858 million every year, according to IATA — approximately $639 million of which is borne by airlines and other companies in the travel industry.
Unfortunately, the unwary travel advisor often ends up getting a debit memo, or the ARC takes action that can include placing an agency in default or revoking its ticketing authority.
Fear not, there are ways to limit risk. One of the best steps is to install software that can detect phishing emails. At our firm, we use Avanan to catch suspicious emails. If you’re a GDS agency, take advantage of your provider’s two-factor authentication options and turn off options for weekend ticketing and cash form of payment. Treat your log-on credentials the same way you would your social security number, and train your staff to do the same.
Phone Scams
Some scammers will actually pick up the phone and call you to make an immediate booking — but they are going to pay with a phony or stolen credit card. Be suspicious of such calls:
It’s very unlikely a random large booking is going to drop in your lap like this. Common factors you’ll notice in these kinds of scams include:
- It’s an emergency trip.
- They need immediate departure (same day or tomorrow).
- They want first/business class tickets to the African continent.
- There’s no caller identification.
- They’re overly friendly/chatty with you.
- They have an unusual email address.
As you have learned by now, if you are the merchant of record, and if a chargeback occurs, you likely will lose the chargeback.
So, please remember, if it sounds too good to be true, it is.
Travel Agency Credential Scams
Travel agency credentials have recently been used by fraudsters to make agency bookings or to book fam trips, so safeguard your information. Recently, an advisor learned that someone used the agency’s credentials to book a 10-person vacation in the Caribbean through a supplier. The criminals went to the hotel and enjoyed a free trip since they had used a stolen credit card. When the chargeback was won, the supplier demanded that the agency reimburse the supplier.
Often, your agreement with a supplier does require this type of payment; however, that is when the agency did something that allowed the fraud to happen (see above sections). Here, the agency knew nothing of the booking until the demand letter came. If you have independent contractors associated with your agency, include a provision in your agreement requiring them to safeguard all credentials (IATA, CLIA, ARC, TRUE), and add this type of problem to the list of claims for which indemnification of your agency will be required.
Wire Scams
The next type of fraud to watch out for involves wiring funds for payment. When you ask a client to wire you funds to pay for their trip, you must be sure to safely share your wiring instructions. Since email is often referred to as an electronic postcard, do not rely on it to transmit wiring instructions. Wiring instructions should be sent using either encrypted software or over the phone. Otherwise, you might ending up paying for the client’s entire trip.
The best advice? Always be vigilant and on high alert: fraud is could be one email or phone call away.
Meet Jeffrey Ment
Jeffrey Ment, of The Ment Law Group, currently works as a travel law attorney and previously worked as a travel advisor, airline sales manager and tour guide. For more than 29 years, he has represented individuals and companies in the travel industry.
Have a question for Jeffrey? Send an email to letters@travelagewest.com.
