Vacation scams: What you need to know

Ten billion dollars a year: That’s how much the Better Business Bureau estimates vacation and travel-related fraud costs consumers each year. Vacation companies mysteriously “disappear” with travellers’ money, or offer sub-standard services or accommodations. “Fabulous deals” quickly turn into costly ventures or disappointment. Here’s how to outsmart the scammers:

Learn to spot the scam

There are a variety of scams currently making the rounds via email, faxes, postcards, mail and phone calls. Many of the offers look professional and sound real, so it’s often hard to pick out the deceptions. These situations should raise a “red flag”:

• The offer is unsolicited (i.e. you didn’t sign up for promotions or don’t know the company).
• The offer seems too good to be true (beware of anything “free”).
• You are “specially selected” to receive an offer or you won a contest you didn’t enter – especially if you have to pay to receive the prize.
• An unknown caller or unsecured website requires your credit card number (before you can see the details in writing).
• You have to pay for the vacation more than 60-days before you leave. (Most credit card companies have a 60-day limit to dispute a charge).
• The salesperson uses high pressure tactics, such as forcing you to book immediately in order to take advantage of a discount.
• You’re invited to become a travel agent to receive discounts and free offers.

Travel discount clubs, vacation certificates and time shares are also suspect. You can even find fraudulent companies through internet ads and professional-looking websites when doing your pre-trip research. Ignoring the offers is usually the best course of action.

While not every offer you receive is fraudulent, it doesn’t hurt to exercise some healthy skepticism. If the deal is tempting, and you think the company is legitimate, there are ways to protect yourself if you proceed.

Check up on the company and the offer

A little research is your best defense. Consider: if you were going to buy a computer or home theatre system, you would likely take some or all of the following steps:

• Talk to someone who knows the product (salesperson or family and friends).
• Read consumer reviews.
• Compare prices and quality to get the best value.
• Get the full details in writing.
• Consider the warranty and return policy.
• Make your purchase from a well-known company with a good reputation.

Chances are you will make a large purchase from a legitimate, well-established business after doing some research rather than making an impulse buy based on an email or phone call. Approaching your “travel investment” with the same diligence can help you avoid the traps.

Start by researching the company or resort through independent sources. Ignore the company’s website (which could also be false) and try to verify its information elsewhere. Can you find its address through directory information? Is it registered with or accredited by tourism and travel associations? The Better Business Bureau (BBB) also has an online look-up tool that provides reports on the company’s standing and track record of consumer complaints. You can also check up the company’s reputation with a simple online search to see where it shows up in consumer reviews and forums. Caution: Steer clear of overly-positive reviews that could be planted by the company itself.

Another step is to compare prices and packages. Get the details of any offer in writing, including all service charges and additional fees. Read the fine print, and see how the prices compare to other service providers. Another word of caution: avoid giving your credit card information over the phone or Internet unless you are familiar with the agent and company.

Research can be a tricky if you’re contacted by phone and don’t have online resources handy. Tell the caller you want to research the company (including contacting the BBB) and do a little comparison shopping first. A travel company with nothing to hide should not be intimidated or offended by this request. Don’t worry about losing out on a one-time-only-deal; that’s a high pressure tactic to get you to accept without asking questions.

As with any other large purchase, consulting with an expert (in this case a travel agent) and dealing with a well-reputed company can save a lot of time, hassle and unnecessary expense.

If you get caught, report it

The travel industry is in the top 25 industries for fraud for a good reason: despite the warnings, people are still falling prey scams regardless of their age, education or financial situation. What can travellers do? File a complaint with a consumer organization such as the BBB, the Federal Trade Commission (US), or Econsumer.gov (an international website for e-commerce complaints). Agencies may vary by country, but it’s worth taking a look because many of these can help resolve complaints and make sure incidences of fraud are investigated by local authorities.

Learning how to identify and avoid travel scams will make sure your travel money doesn’t end up in the hands of criminals.

Resources:
BBB Warns Vacationers
Don’t Get Tripped Up When Traveling (FTC)

Photo ©iStockphoto.com/Orchidpoet

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