Common Scams in Travel Industry

travel industry

With the rise in modern technology, anything is possible. Every industry is facing new technological trends to streamline its business operations. Unfortunately, technology does not come without its problems. The negative impact of technology can prove to be a major concern for these businesses that have enjoyed all the perks of it. Companies focused on streamlining their businesses forget that fraudsters are trying to use them for criminal motives. Travel industry scams are on the rise and have become a new kind of headache for law enforcement authorities and regulatory bodies. In this blog, we will discuss the most common travel industry scams and how to avoid them. 

The Types of Travel Industry Scams

A Finextra report suggests that the travel and tourism industry provides 10.2% of the global GDP. The total of fraud that the travel industry has to face costs $21 billion every year. This figure is expected to increase by 20% hence the amount can increase up to $25 billion.

Here are some of the fraud listed below 

Fake Travel Agency Scam 

This is one of the most common scams the travel industry has to face. There are travel agencies that are fake companies and scam people into buying fake tickets or fake bookings at the hotels. This ends up ruining the repute of the hotel or travel company. They have to compensate for the victims or else they will not only lose customers but also the good name of their company. Sometimes, these fake travel agencies sign contracts with hotels or aeroplane companies to provide the customers and instead end up scamming them. 

Money Laundering 

This is so far the biggest problem the law enforcement authorities. Money laundering is mostly done through taking the money out of the country and this is the reason the travel industry is at risk of criminals indulging in their money laundering endeavours. The airports have to be extra vigilant while attending to passengers as they are using different methods to pass their illegal cash. Criminals forge their identities to be able to scam the system and pass their illegal cash. The hotel business is famous for being a front business for the money launderers. The owner or higher-level employees tamper with the billing system integrate their illegal funds into the legal system. 

Chargeback Fraud

Due to the rise in identity theft, the chargebacks have become pretty common. What happens is that when a criminal has stolen the identity of an individual, they can access their payment and credit information. Once that is done, they can use their cash for their personal use like buying an international trip or rent a room in a hotel. When te victim discovers being charged with the expenditures that he never used, he can ask his bank to reverse the transaction. This way the hotel or travel company will be left to pay back the victim while losing their services to a criminal. Sometimes, a fraudster after using the services can request the chargeback claiming their identity was stolen. If the travel industry has carried out a proper verification process, they can catch some criminals and not be a victim of scams.

How to Avoid the Travel Industry Scam 

The best way to protect your businesses from such scams is to have a proper travel ID verification process. The digital identity verification can protect the industry from the rising number of scams while legit customers can avoid the hassle of verification. Here are some ways discussed below that can streamline your identity verification process and assist your business remain fraud-free.�

Face Verification

This is the process that uses the facial features of an individual to verify their identity. The end-user just has to provide their selfie with a picture of their identity card and AI-powered solution will take care of the rest. The face is matched against the photo from the identity card to ensure the legitimacy of the end-user.

Document Verification

This procedure verifies the customer�s identity by ensuring the legitimacy of their documentations. Their identity card can be verified through AI and machine learning that is trained with various document types to be able to detect which document is original or fake. 


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