Fraud is on the rise in the travel industry. And travelers are increasingly at risk of becoming a victim long before they even leave their homes.
Those are just some of the highlights of a recently released report from the Mastercard Economics Institute, which delves into the how and why of scammers targeting travelers.
Among the noteworthy takeaways, an analysis of Mastercard’s aggregated and anonymized transaction data reveals that in 2024, the fraud rate during the early stages of trip planning increased more than 12 percent compared with the previous year.
This early-stage fraud shows up in the form of manipulated destination photos, fake confirmation links, and false offers, with fraudsters preying on the desire for discounted travel amid inflation and economic pressures.
The report goes on to note that popular tourist destinations, particularly those that attract large crowds, are prime targets for fraudsters due to the high concentration of visitors and the increased volume of transactions.
“For example, scammers establish fake tour companies, luring tourists with irresistible offers for guided tours, excursions, or exclusive experiences,” says the report.
It’s not unusual for fraudulent operators to require prepayment or offer unusually low prices to entice travelers. And then, once paid, the tour may either never occur or be drastically different from what was promised.
Where Fraud Occurs Most and Least
As it turns out, some cities have notably lower rates of payment fraud than others. For instance, tourists visiting San Francisco, Dublin, Seoul, Budapest and Edinburgh report the lowest fraud rates, says the report. By contrast, transactions in Cancun, Hanoi, Dhaka, and Bangkok are more likely to be part of fraud-related activities.Exposure to fraud also differs by city, the report says. For instance, in cities like Cancun, Delhi, Barcelona, and Hong Kong SAR, a major share of payment-related fraud happens with travel agencies and tour operators. In contrast, Phuket and Antalya see more fraudulent activity related to hotel bookings.
Meanwhile, food services are the primary target for fraudsters in Riyadh, Manila, and Los Angeles.
Finally, the report points out that holiday seasons significantly exacerbate the risk of fraud taking place, given that these are times when travelers actively search for bargains.
“Scammers capitalize on this by presenting offers that seem too good to be true, encouraging customers to make impulsive decisions without verifying the legitimacy of the deal,” says the report.
“As criminals exploit the surge in transactions and the travelers’ heightened eagerness, fraud rates rise during both the summer and winter peaks.” The report adds.
Mastercard’s internal data reveals that the reported fraud rates increased by more than 18 percent at popular summer destinations during warm periods and more than 28 percent during the cold season at winter destinations.
