Many travel advisors live in fear of a potential credit card chargeback — and rightly so. If a client initiates a dispute on their credit card, the vendor will pass that charge onto your host agency, which then passes it on to you. Not only will you lose the commission for your work, but you will owe the entire amount of the client’s trip to the vendor.
But let’s take it a step further. What if that client — or whoever signed that credit card authorization form — wasn’t really who he said he was?
Let me tell you my story: I received a call one afternoon from a new client who said he was trying to book with a resort partner, but was having issues with their website. His friends were already going on the trip, and he was hoping to jump onboard with them at the last minute.
He wanted me to help him book a room.
The red flags immediately went up, but I did my due diligence and explained that before I book any last-minute travel, I needed to see a picture of everyone’s passports, as well as a picture of the credit card that would be used for the booking (to ensure that his name was, in fact, on the credit card).
Everything matched up. I thanked my lucky stars for the good fortune and clicked submit. He didn’t even blink an eye when I told him the total was close to $17,000.
Did a miracle just fall into my lap? I was going to make over $3,000 in a matter of 15 minutes.
Identifying Red Flags
A few days later, after the glow of my good luck wore off, I noticed something just didn’t feel right to me about this new client’s situation. I am the daughter of a private investigator who focuses on white-collar crime, so I reached out to good ole Dad to see if there was something I missed.
He did a quick search of the client’s name and found that no one in the U.S. had that name and birthday match. However, the other travelers were all real people ... with very long rap sheets. Despite this, the main person who had booked the rooms was completely made up. They had even gone so far as to create credit cards in this made-up person’s name.
I picked up the phone and called the resort immediately to cancel the booking. However, I was told that anything inside of a 30-day booking window was nonrefundable, and the credit card would still be charged. I explained the situation, and was told there was nothing that could be done — so, I started looping in every person I have ever met in power at this supplier, as well as the leadership at my host agency.
Although I have learned a lot from this experience, the biggest eye-opener was the fact that my supplier partner didn’t have my back.
Fast forward: The fraudsters boarded the plane (which they had booked themselves), showed up at the resort, and the hotel did not let them on the property. (We actually had the police waiting for them at the airport. That, at least, was gratifying for me!)
Fraud Can Happen to All of Us
I had a friend in a similar situation, who wasn’t lucky enough to discover the issue prior to the clients’ check-in. The supplier explained that because a traveler showed up and used the services rendered, that someone needed to be responsible for those costs. They even threatened to withhold all future commissions from my friend when she had significantly more than this on their books.
She ended up paying them $13,000.
Here’s what I’ve learned: Every single vendor out there will do the same exact thing to you. They are not on your side, and they want to get paid, regardless of how that happens.
Tips for Avoiding Fraudulent Charges
Here are a few steps travel advisors can take to protect themselves from these types of situations:
- The mass majority of fraud in the travel industry takes place right before the client’s departure. To be safe, refuse to book anyone within 30 days of departure.
- Ask for a picture of the front and back of the credit card, so you can ensure the name matches. Then, call the number on the back of the credit card. Ask the bank if that name is authorized to use that credit card number.
- Get a picture of the client’s driver’s license. (These are harder to forge than a passport, according to my dad.)
- Ask your host agency if there are any fraud-prevention programs in place to educate their travel advisors about this problem.
- Contact your general liability insurance company to see if it has chargebacks listed in its policy. If this isn’t covered, find an option for chargeback insurance. (The only issue here: Other advisors have expressed that, if you use it, you typically won’t get approved for a policy the following year.)
Lessons Learned and Final Thoughts
Although I have learned a lot from this experience, the biggest eye-opener was the fact that my supplier partner didn’t have my back. If I had not stopped these clients from checking in, I would have had to pay the money back to the vendor. Neither my host, nor my consortium, nor my errors or omissions insurance company would have helped.
There should be more people in this industry trying to stop these fraudulent practices, so small travel agencies don’t pay huge prices for this deceitful behavior.
Fraudsters will only get smarter. But since when is it a travel agent's job to be doing background checks? There should be more people in this industry trying to stop these fraudulent practices, so small travel agencies don’t pay huge prices for this deceitful behavior.
Suppliers shouldn’t get a pass, either. Vendors should have their own fraud prevention policies in place to ensure these last-minute bookings are legitimate. I think it’s simply too much for a travel advisor to be responsible for.
Watch yourselves out there — you can never be too cautious.
